alright, it took me DAYS worth of tinkering, but i think i nailed it. it's a total hackjob, but it seems to be working in lab tests (IP 2007). should work for not only shrinking, but enlarging signatures.
1) While in design, and you have your form with a signed section, go to File -> Save As Source Files. Save them to somewhere.
2) Open up Windows Explorer, and traverse down to wherever you saved those files.
-- commentary: in here, you'll be making all the modifications to "view1.xsl", but to view your changes you'll need to right-click -> design on "manifest.xsf". WARNING: Upon closing manifest.xsf, never save changes. IP messes with your code and it won't work after that.
3) Right click on "view1.xsl", and edit/open with notepad (can you smell the hackjob coming?).
4) Search for the name of your signature binding. In my case, it was the first occurrence found. *should* be the same for you.
5) We're going to manually put this signature into its own table and control the TD height of it. So, to reduce your siggy to 30px, inside the <td> tags of your signature, encapsulate the contents with these two:
<table style="TABLE-LAYOUT: fixed;"><tr><td height="30px">
</td></tr></table>
6) Now, you need to find where it actually displays your signature, and shrink that down, otherwise the signed portion will appear to be blank. Search your "validsignature". In my case, it was the first occurrence found. if you look up 17 or so lines, you should see a line that says "SignatureBlock="yoursignaturename" " as a parent XML node. So, you'll know you're in the right area.
7) Below wherever you found your validsignature, you should see a block of code encapsulated by <xsl:choose> tags. This is where it determines whether or not it's a valid signature. The first child should be the valid signature block. The <img> tag in there is the image of the signature block. Simply change that tag to have a height/width of whatever you like. preferably it'll fit into whatever you put up in instruction #5 above.
After you mess around with it for a while, you should be able to pick it up. I DO BELIEVE that in order to get all of these files back together, is to right-click on "manifest.xsf", go to design and then publish.
Hope this helps someone else down the line. Mostly, I hope it helps me on Monday morning to remember all this stuff.