They call it watermark because somewhere in the 13th water coated metal stamp was used for this job. Today there is no need to get your self wet, just use Photoshop and few adjustments.
First open image you wish to watermark, I used portrait of my girl I drawn some time ago:

Create New layer and create an object. This can be anything. You can type some text, create a small graphic, whatever. Here I use my hand signature:

Right now you have two layers, the one with image and the other with newly created object. Turn off visibility of the image layer by clicking the eye icon in layer palette. You will be left with transparent background and graphics. Choose Rectangle tool and create selection around your graphics.

If you are like me and not quite precise, right click inside your selection and select Transform selection to adjust dimensions properly. Now go Edit>Define Pattern and name it to your preference.
This way you have created a new pattern, you can use this same procedure when creating your other patterns.
Deselect by pressing CTRL+D and delete graphic layer. Your image layer will automatically become visible again.
Create a new layer and name it Watermark. Choose Paint bucket tool by pressing ?G? on your keyboard. This is also shortcut for Gradient tool, so you must check which one is active at the moment. You can switch between these two by holding SHIFT while pressing ?G?. SHIFT key is used to quickly navigate through Tools submenu.
In the tool option dialog, found in the upper line choose pattern option, and choose your newly created patter. You will find it in pop-up menu, last one in the row:

With Paint bucket tool active click anywhere in your Watermark, layer:

OK this would definitely give impression this is your work, but you will agree it is a bit too aggressive. I reduced the layers opacity to 5% and changed Blending mode to Overlay, you will have to experiment what works the best for you example. Here is the new watermarked image, all nice and discrete.

Remember, key words are discretion and subtleness. You wish to protect your work, but you also wish to keep your work in the front, not your watermark.
Hope you learned something, and good luck with promoting your art,
-maliDM


