2bits was commissioned to write a watermark module for Drupal's image module.
The module basically overlays a predefined PNG over each image uploaded. Options exist to restrict the watermarking to certain images and not other (e.g. thumbnails are not watermarked, but full images are).
Ivan Raszl of Creativine and CreativeBits talked me into organizing a bounty for this module before releasing it to the community, and advertised it here. The site has demos as well as a screen shot of the settings page for the module.
Whether this is successful or not remains to be seen.