Xing's Signature&Art Company

[Xing]

oh. He's using transparency - this needs at minimum 3 layers in photoshop; the first one at the bottom is your empty background. It must have no colours in it at all.
Then your second, it's your "real" colored background, but obviously, is smaller than the complete background.
At the top of this, put your ship.

You can either save the file then in PNG or GIF - make sure to check transparency setting.
I did like these kind of sigs, but I thought they wasted too much space...

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