Create your watermark on a new transparent canvas (File>New>BackgroundContents=Transparent). 1000x1000 pixels should be sufficient. Save as "Watermark" or something along those lines.
Open an image that you wish to watermark.
Open the watermark image.
Drag the Background Layer of the watermark image onto the image you wish to water mark.
Use the arrow cursor to move the new watermark layer around the new image and place it where you would like it to be.
Change opacity if need be and use Free Transform (Control + T on a pc or go to Edit>Free Transform) to change the size of the watermark.
It's a little vague, but you get the drift?
This post was edited by lithfkn on Apr 13 2010 06:53pm