This plugin simply forces the browser (via htaccess file) to add a watermark to any 'jpg' image that the browser requests - a simple, catch-all solution to protect all jpg images on your site from unscrupulous downloading. The image is not actually modified at all - and can still be downloaded without the watermark via php scripts or FTP - e.g. if a customer has purchased access, maing this an incredibly useful plugin for sites selling images or visual resources. Very pleased to have found this.
Customisable according to Wordpress thumbnail size - e.g. can prevent watermarks on the small cropped thumbnails, but apply them to larger ones.
Cannot select which images to apply the watermarks to, but you can use pngs and gifs for your images that don't need watermarks (e.g. your logos and interface images) as out of the box, the plugin does not affect these image formats - although the developer does suggest that they can be supported with a tweak to the htaccess file.