It would be great if it were possible to only add the watermark to images that are show outside of the domain this add-on is installed on.
For example, when my users look at the images on any
http://outdoor-photo.net page, no watermark would be shown, but if someone were to link a photo to say vBulletin.org, then the watermark would show up.
Also, it would be important that the watermark is only added to images of a certain size, so that someone who uploads a 20pxx20px image doesn't get a 120x15 watermark slapped onto it.