A. Why doesnt Odin work?
Did you unextract the tar and pit from the rar/zip so that odin could recognize the files as suggested in dagger's link
in section 1b step 2?
Did you install samsung drivers on your computer properly? You may use this toolkit
B. Rescue by CWM
Signature verification failed is caused (I think) by stock samsung recovery's choosiness, if you are sure you downloaded the zip correctly. What zip did you exactly try to flash?
So now, you may want to flash a cwm recovery or a kernel that contains cwm inside. Flashing usually uses adb
using fastboot. Search "flashing a recovery image" or "flashing a kernel" where your chosen kernel should have cwm inside. cwm usually does not put out that signature verification error.
You can access recovery mode through an app or by pressing a button combo when turning your phone on. Device specific.
Stock samsung recovery can wipe data.
CWM can also wipe data, and is the preferred installation method for most/all custom roms. And it can make a nandroid backup.
If ever you do choose to flash, you'll need the toolkit to install adb/fastboot drivers, but maybe since yours in locked bootloader the adb thing might not work.
Hope this helps
Give thanks where due.
Samsung Galaxy Y GT-S5360++++++++O+8.31z | GT-P1000