First things first is to open your sig, i'll use this one:
user posted image
1. first off do the following twice: {LAYER>DUPLICATE LAYER}.
2. select the bottom layer and do the following: {LAYER>DELETE LAYER>LAYER}
3. select the top layer and do the following: {CTRL+I}
4. select the gradient tool, and change the settings to the following:

5. now starting form the top do tiny gradients all the way down.
6. If the sig is colored it might look a little strange, so...
7. Drag the top layer to the bottom.
8. Select the top layer and change the blend to {COLOR}
9. End result:
user posted image
Mpre examples:




