Adding a watermark to your images is a good way of preventing them being used inappropriately by others, and for branding your pictures. This short tutorial uses Photoshop to apply text and image-based watermarks.
Open your image in Photoshop

I’m just using a random image from my computer
Select the Type tool

Select the type tool (or press T) and then click on the colour chip (2) to select an appropriate colour. I’m going to choose white.
Type your watermark text

Type something like your name or your company name, or your website address.
Scale the text up

You could do this simply by changing the type size but if you’re not sure how to do this, then go to Edit>Transform>Scale

Grab one of the corner handles and scale your text up. Press the shift key to keep the proportions right.
Adjust the transparency

In the layers palette, click on the Opacity arrow and either type a number of drag the handle until you have it subtle enough that it doesn’t obscure your image, but clear enough that it can be read.
Move it in to place

Move the text around until it’s somewhere it can be read without obscuring the image. Because my image already contains text I need to make it obvious that it’s not part of the design so I’m going to rotate it.
Rotate the text (optional)

Back to the Transform menu, this time to rotate.
The finished image

Now it’s unlikely anyone will steal this image! A better approach might be to put your website address on there, or a logo. To use an image as a watermark, just drag an image onto your Photoshop file and adjust in the same way. If you create a logo in Illustrator you can File>Place the image and adjust it before pressing Return to confirm the new size.
Save for the web or email

Now we need to save the file as a copy for the web or for emailing to people. Go to File>Save for Web & Devices.
Select appropriate file types and sizes

Select an appropriate file type (JPEG or PNG) and click Save (you might want to make the image size smaller so it doesn’t swamp the person you’re sending it to or fill your webpage or email outbox too much. Select a place to save the file and upload the result to your site or attach it to an email. Doing this leaves your original file as it is, so you can hide the layer with the watermark or delete it altogether.