I've been trying to figure a way to implement it, but AFAICT it'd have to be done as a file storage issue (a la thumbnail creation) .. basically overload the filepile to make the watermarked image at the time of filepile upload.

Here's a start:
For example, to add a colored border to an image and superimpose text annotation, you could use a command like this:

convert brugge.tif -resize 200x150 -fill white -gravity southwest -font arial -pointsize 15 -draw "text 2,20 'Brugge, Belgium - 2004'" -border 5x5 brugge_annotated.jpg

The effect of most of these directives should be clear. (-gravity defines the corner of the image that text falls into, in this case the lower left.) ImageMagick processes them one at a time to produce the resulting image (see Figure 1).

Another ImageMagick trick is superimposing a watermark on your images:

composite -watermark 30% -gravity southeast pcmlogo.gif volcano.bmp volcano_watermark.gif