If the other person will be using Reader, you should first add a digital signature field and then Reader enable the form. In Acrobat 10 you'd select: Tools > Forms > Edit
to get into form editing mode. You'd then select the signature field tool to add a signature field.
Once you have the document finalized, Reader-enable the document by selecting: File > Save As > Reader-Extended PDF > Enable Additional Features
being sure to save to a new file so you don't overwrite the original. If you don't Reader-enable, Reader users won't be able to digitally sign.