First off,  the signal arms should point inward, towards the track the signal controls, not outward.

Second, it would be really nice if the signals actually showed aspect correctly. Right now they all show stop all the time. They should show proceeed (arm raised) when the following block is clear.

Signals that control a junction should have two arms,with the lower arm controlling the diverging route, like this: http://upload.wikimedia.org/wikipedia/commons/7/7b/Rail-semaphore-signal-Dave-F.jpg

In the ideal situation, the game should also add in distant signals ahead of each main signal by a train length or two. These are typically yellow arms in real life, and indicate the aspect of the following signal.