Live Watermarking?
 

Does anyone know if it's possible to add a watermark over the top of images that users upload to a site?

For example I run a website that I allow users to upload photos on, but obviously I lose a lot of band width due users posting the URL on other sites etc.

What I would like is all photos uploaded to my site to have my message / logo added over the top (such as Hosted By ******) so that if people then display the photos on other sites I gain by having my site advertised (fair exchange for me paying the bandwidth).

Anyone know if possible or sites that do similar already?

thanks.