I used windows movie maker (included in vista and xp I think) but you have to install a script, do a google search for windows movie maker + watermark
I would say search these forums because it's CONSTANTLY being talked about, but then again, I imagine you're asking it these forums because you can't do a google search so I guess you're out of luck.
I'm using watermark factory. Advantages is that is very simple to use, but disadvantage is that you can't hide the water mark and show it again. Also it makes videos little bigger. You can also check Virtuel Dub.
Check the Image Watermark Plugin on playerdiy.com - http://www.playerdiy.com/configuration/addons/watermark-image.html Here is the tutorial - http://www.playerdiy.com/support/tutorial/customize-flash-video-player.html
VideoCharge Studio. It is no free tool, but has free trial. You can read below step by step as create video with watermark! http://www.videocharge.com/Products/vcs/doc/how_to_create_video_with_watermark.php
I am using this software for video watermarking. The cracked versions are easily available. search on google for 'camstasia'
BubblePLY.com? A new type of chewing experience, hmmm, we mean a video experience. Have you seen a video you'd like to comment on? Do you want to add information to a video and share it with others? Have something funny to say? Want to add a subtitle? It’s all possible with BubblePLY.com. We are a free online annotating service where anyone can experiment with creating and/or viewing layers (PLYs) of bubbles that are synchronized with a video on a player. You can expand your viewing experience by adding personal comments or thoughts in the form of captions, or as we like to call them - bubbles.