I followed the SmugMug tutorial for creating watermark (http://dgrin.smugmug.com/gallery/1690196) and the instructions for how to apply it within Smugmug (http://help.smugmug.com/customer/portal/articles/93343), but I used Paint Shop Pro (v. 11, I think) instead of Photoshop to create my watermark. I don't think it really matters WHICH software you use as long as you follow the general instructions for creating the transparent image/text. It took me a little bit to look at the photoshop screen prints and find the equivalent action within psp, but I got it done with very little effort.
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www.acecootephotography.com
Sherry