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I realize this is an old post, but I have run into this same problem myself. I'm using XOOPS 2.2.3a, with the Xoops.2.2.4 patch. I have check the permission under "Profiles" and the signature is editable to all groups.
Some how, the "Signature" in profiles is associated with the "Displayname". An error (Displayname is to short. Must be more than 3 characters.) comes up when anyone other than the Admin, tries to edit or input into their signature.
Any ideas where that statement is coming from?