I just stumbled on this hack, seeing it doesn't work.
Searching the ImageMagick site shows multple command line ways of watermarking.
Question: couldn't it just be accomplished by something like this:
PHP Code:
shell_exec('composite -gravity SouthEast -compose plus ' . $watermark_image . ' ' . $original_image . ' ' . $destination_image);
If so, where would you put that command?