Firstly, I should say that success while hitchhiking is hard to measure, due to the many factors involved (and chaos). People who never use signs will insist they aren't needed. Those that always use them swear by them. There's no way to tell what's best because it depends on... everything!
Here's a technique for using signs effectively with local traffic that helped me in southern England.
I was about 100 miles away from a major city, which was my destination, Brighton. I wrote 'Brighton' on a sign. Nobody stopped! I wasn't on a motorway, so the highway seemed to be all semi-local traffic.
I figured the drivers saw the Brighton sign, thought "I'm not going there! I'm just going to xyztown," and then passed me.
So I wrote a sign for the nearest town! I got picked up quickly by someone who knew the town and was passing it. I asked him what was the next town after that and made another sign. It took many rides to get to Brighton, but at least I was moving! There was no long distance traffic on that road anyway.
This technique is only useful on routes with local traffic. If you're on a motorway, the drivers probably aren't from the area and don't know the names of the small towns.
Hitchwiki, by the way, has an article on signs. (Has nobody mentioned it yet?) One thing that I've always remembered from that article was:
Write only the initial letter in capital. The human brain detects a word not only by combining a few letters, but also by recognizing the different ascenders and descenders (the heights of the different words). When writing only in capital letters you lose this advantage. That's why street signs respect the upper and lower case.
It makes sense to me.