Where did the Zodiac come from? Why are the astrological signs what they are? These are a couple questions I asked myself quite a while back and found that it's all rooted to Greek Mythology (imagine my glee). Anyway, I finally found my notes to this, so here's my brief explanations.
First of all, the word itself, zodiac, comes from a greek word meaning, "The circle of animals". The animals representing the signs were placed among the stars usually for great acts of heroism.
Aries - The origin of Aries stems from the tale of the Golden Ram. In a plot to trap the centaur Ixion, Hera created a woman looking nearly identical to herself out of a cloud and named her Nephele. She then forced King Athamus to marry this woman. This relationship didn't work out at all as Athamus became bored with Nephele fairly quickly and left her. Athamus almost immediately after this, married Ino. This of course angered Nephele, so she asked Hera for vengeance. Hera had no problem in doing this as she was already angry at Athamus and Ino already as a cause of them taking care of Dionysus for Zeus. Hera then proceeded to poison their minds and make them crazy. Athamus attempted to sacrifice his son by Nephele, Phrixius. This plot was thwarted when Heracles sent a Golden Ram to save him. When the ram brought Phrixius to his destination, he sacrificed the Golden Ram to Zeus and in turn, Zeus placed the mighty ram among the stars for his heroic deed. It is also from this ram that the Golden Fleece from the tale of Jason & the Argonauts came from.
Taurus - The sign of Taurus stems from the Tale of Europa and the Bull. This is a tale of one of Zeus' many affairs. Zeus was extremely attracted to Europa and yearned for her affection. Zeus then appeared before Europa in the form of a magnificent white bull. Europa couldn't resist petting the bull, so she walked over to it and did just that. She then climbed upon the bull's back at which point the bull carried Europa across the sea to Crete where he then took the form of an eagle and, for a lack of better terms, raped her. In remembrance of this affair, Zeus placed the image of the bull amongst the stars.
Gemini - This sign stems from the Tale of Castor and Pollux. Castor and Pollux were half-brothers. Castor was born of Tyndareus and Leda, Pollux was born of the affair between Zeus and Leda (also known as the Tale of Leda and the Swan). The twins grew inseperable as time went on. One day, Castor was killed in a battle. Pollux was so grief stricken that he took his own life to join his brother at death. In honor of the brothers' great love, Zeus placed them among the stars.
Cancer - The sign of Cancer stems from one of the 12 Trials of Heracles. While battling the Hydra, Hera sent down a giant crab to thwart his efforts. The crab was only a nuisance at most as Heracles simply crushed the crab under his foot just before he defeated the Hydra. Hera honored the crab's attempt at stopping her most hated of Zeus' children by placing it amongst the stars.
Leo - The sign of Leo stems from yet another of Heracles 12 trials. Leo of course represents the Lion of Nemea which was Heracles' first trial. The lion couldn't be defeated by any weapon. Heracles eventually battled the lion hand to hand (or maybe paw) and strangled the lion to death. In rememberance of the grand battle, Zeus placed the Lion of Nemea amongst the stars.
Virgo - One of the few signs not represented by an animal, Virgo's origin stems from the Tale of Pandora. Virgo of course is the representation of the goddess of purity and innocence, Astraea. After Pandora opened the jar and let loose all the evil's unto the world, the gods who lived on the earth fled back to the heavens and away from the evil's of the earth. Astraea was the last to return to the heavens. As a rememberance of innocence lost, Astraea was placed amongst the stars in the form of Virgo.
Libra - Libra are the scales that balance justice. They are held by the goddess of devine justice, Themis. Why exactly she is placed among the stars I haven't yet found out, but it is interesting that Libra shines right beside Virgo which represents Astraea, daughter of Themis.
Scorpio - The sign of Scorpio stems from the Tale of Orion. Orion was the son of Poseidon and Euryale. Orion was also a favored hunting partner by Artemis which made her brother Apollo very envious. Apollo pleaded to Gaea to create a giant scorpion to kill Orion. Gaea obliged, and the scorpion stung and killed great Orion. In rememberance of this struggle, Zeus placed Orion and the scorpion amongst the stars.
Sagittarius - This sign is representative of the centaur, Cheiron. Cheiron was a friend of many great hero's in Greek mythology such as Achilles and Heracles. Speaking of Heracles, some friend he turned out to be. While hunting, Heracles accidently shot Cheiron in the leg with a poison arrow. Cheiron was immortal so he couldn't die, he just had to take the unending pain. Heracles promised to help him somehow. Upon his ventures, Heracles came upon Prometheus who was trapped with no way of escape. The only way Prometheus could be set free was for someone else to take his place. Cheiron wanted only to be relieved of his insufferable pain, so he took Prometheus' place and died. In honor of the noble act, Zeus placed Cheiron amongst the stars.
Capricorn - The sign of Capricorn represents the goat Amalthea who fed the infant Zeus. It's said that Zeus placed her among the stars in gratitude. Other accounts say that Capricorn represents Pan, the god of the forest, woodlands, and nature.
Aquarius - The sign of Aquarius stems from the Tale of the Deucalion Flood. In this tale, Zeus pours all the waters of the heavens onto earth to wash away all the evil beings. Deucalion and Pyrrha then threw stones over their shoulders and created a new race of mankind.
Pisces - Pisces represents the goddess of love & beauty, Aphrodite and the god of love, Eros. While taking a stroll down the Euphrates River, they had an encounter with the vicious Typhon. They pleaded to Zeus to help them escape, so Zeus changed the two into fish and they swam away to safety. In rememberance of this, Athena placed the twin fishes amongst the stars.