I just did a sig quilt this summer for my mom's 80th. Didn't use photos, so can't help you there. I did signatures and we used the 05 pigma pens, heat setting them after signing. I used a 6" block, Indian Hatchet if you put 4 together.
I did a search on webshots for memorial or birthday or anniversary quilts and found lots of ideas. Here are a couple
http://home-and-garden.webshots.com/...79995222uRsrCv
This one here I loved, because if you look closely, or actually far away, you can see the blocks turned and make a cross in the center.
http://home-and-garden.webshots.com/...47360074juhTFz
I have no idea who these women are, but loved their quilt!