First of all make your self a watermark and save as png or Gif etc
mine is a .png file.
The in the gallery admincp goto Uploading Options there you will see Watermark Images
here you need to put in the path to your watermark picture, Has to be the Full path and Not the url.
Then the pictures you upload will be watermarked unless you tell it other wise.
If you already have pictures in the gallery then you can then go to Maintenance and add the water marks there
This tool will allow you to watermark all images at once. Warning: This process is not reversable! Please be sure to backup all files/folders in your directory before proceeding!