HTML signature problem in Office 2003

I am using WinXP Pro with Office 2003. When making an email signature in HTML with Word as an editor, I add the company logo to my signature. When I click on new email my signature w/logo looks wonderful, but when it gets to it's destination, the logo comes as an attachment and the signature text looks double spaced.

I also have trouble sending other items that have graphics. Ex: sending a UPS confrimation to another user, the email comes with all the graphics as attachements and the tetx is spread out over approx. 5 pages.

Other people in the company are using the same Winxppro with Outlook 2003 and have no problem. What am I missing? Any help would be appreciated.

 

They may have their mail reader set to Plain text.
I do.