In reply to a PM from an SP member i integrated the watermarking script into his code, that was pretty much original! Below is the code which should work with most people scripts. Note that you need to place it immediatly after you copy the image from the TMP dir to within your site.

PHP Code:
// Store the orignal file
copy($photos_uploaded['tmp_name'][$counter], $images_dir."/".$filename);
 
// Watermark the original file
//////////////////////////////// WATERMARK SCRIPT ////////////////////////////////////////
///////// Courtesy of Rob Guard (www.infizi.com // rob@infizi.com) and Sitepoint /////////
// Requires GD Image Lib 1.8++ //
$my_watermark "watermark.png"// Must be PNG-24 Format - Create in photoshop using a trasparent background - set the image layer trasparency to around 40%

$margin 5// px margin around watermark
$my_image $images_dir."/".$filename;

// Get the watermark image, load it in to a variable and get its size.
$watermark imagecreatefrompng($my_watermark);
$w getimagesize($watermark_image);

// Create the read and write functions for the new image
$function_suffix $gd_function_suffix[$filetype];
$Create 'ImageCreateFrom' $function_suffix;
$Save 'Image' $function_suffix;

// Load in Image to be watermarked
$image $Create($my_image);
$image_size getimagesize($my_image);

// Total width - watermark width - margin gives co-ordinates for the watermark.
$dest_x $size[0] - $w[0] - $margin;
$dest_y $size[1] - $w[1] - $margin;

// Merge the images
imagecopy($image$watermark$dest_x$dest_y00$w[0], $w[1]);

// Save $image to $my_image
$Save($image$my_image);

//Destroy TMP files
imagedestroy($image);
imagedestroy($watermark);

////////////////////////////////  END WATERMARK   ////////////////////////////////////////