Version:           1.11.1 (using KDE 4.2.1)
Compiler:          n/a n/a
OS:                Linux
Installed from:    Ubuntu Packages

Problem: Signature is inserted after email template is expanded.

When replying to emails I want the cursor inserted at the top, followed by my 
signature and then the previous email quoted below.  When a signature is 
enabled, the cursor is inserted below the signature and not at the top of the 
email.  The signature appears to be inserted above the block corresponding to 
the email template.

Version: KMail 1.11.1, KDE 4.2.1, kubuntu 8.10.

How to recreate the problem:

1. Tools -> Configure Kmail -> Composer -> General
Select "Insert Signature above quoted text"

2. Tools -> Configure Kmail -> Composer -> Standard Templates -> Reply to 
Sender
Move "%CURSOR" to the top of the template so that the cursor is inserted
above the reply to email.

Assuming your identity is using a global template.  If not do #2 in
Tools -> Configure Kmail -> Identity -> Modify -> Templates

3. Tools -> Configure Kmail -> Identity -> Modify -> Signature
Select "Enable signature"
Save a signature (anything)

4. Now reply to an email, the cursor will be inserted below the signature.

Possible solution:
Enhance kmail with a %SIGNATURE template variable, users would then have full 
control of where the signature appears relative to the cursor in the reply 
email.

A new UI question then arises, if templates support %SIGNATURE, what should 
happen to the "Automatically insert signature" and "Insert signature above 
quoted text" check boxes?

Removing them from the UI is one option, but that may make kmail more difficult 
for users that only want signatures but for whom templates are too 
complicated.

Another is to automatically adjust the templates so that %SIGNATURE is 
inserted/moved/deleted in a way consistent with the setting of the check 
boxes.  The implementation of this would be a bit more complex.