M.O. is the sequence of events necessary to actually commit the crime. The criminal does each part a specific way because it has led to success. For instance, a burglar may always enter through a bedroom window because the burglar has met with success doing this. M.O. because a habit or fixation that is directly related to committing the crime.
A signature is an action done that is beyond the act of the crime. It is a tell tale sign for that individual. For instance, the lipstick murderer always used red lipstick to write on bathroom stall doors taunting police. Leaving the message was not necessary to kill the girl but it was necessary for the killer to leave his mark or statement. Other signatures include taking trophies or defecating on the scene.
Both modus operandi and signatures aid in profiling a suspect. Each action identifies something about the perpetrator. The profiling may be physical (height or build), psychological (mood), or even emotional (calm and collected vs rushed). Profilers use many different tests and references to develop their profiles. There are even cheap profiles in book stores or online that allow you to do a basic profile of yourself: intelligence tests, personality tests, career interest surveys, and the list goes on and on. Even vehicles can be profiled!