More complex form of password
Possession of signature file is required to gain access
Often protected with a passphrase
Vulnerable to trojan attacks
In more secure systems, where passwords are deemed to be insufficient to provide secure authentication, a digital signature can often be used.
This is really just a very long, complex type of password that's virtually impossible to guess. It usually takes the form of a file generated by software, and is often created with a passphrase that protects it from unauthorised use.
The digital signature file can be carried on a USB key or floppy, or can be installed permanently on computers known to be trustworthy. However, as with any file-based security system, digital signatures can be vlnerable if either computer is infected by a trojan, as once the signature file is stolen, it is only as strong as the passphrase protecting it.