I was looking for few free digital watermarking php scripts for images, First I thought I will use transparent watermark and use some image library like Imagemagick, Also one can use Image or text watermark. Use any of these free watermark tutorial for images.
Simple Steps to follow
Open Image > Watermark > Edited Image > Save
Good Tutorials
http://www.phpjabbers.com/put-watermark-on-images-using-php-php20.html
http://www.devshed.com/c/a/PHP/Dynamic-Watermarking-with-PHP/
http://www.sitepoint.com/article/watermark-images-php/
http://www.tutorial5.com/content/view/129/52/