NEW **RULES*LINKS*TUTORIALS*ETC!** (all info)
I'm using PS CS2 but it should work in any version, elements too I assume. Really simple, not much is different to the usual method but I'll lay it all out for those who have no idea on any of it. If you are using a watermark more like a logo stamped in a corner it's not so useful but for places where you want a mark that doesn't stop you from seeing the photo it's good.
Open a new doc. 2500 pixels wide at 72dpi, any height you like, best to start big and just not use all the space I chose 2500x1000(and should have used more of the height). Make sure you have a transparent background
Use the marquee tool to make a rectangle going right across the middle and fill it with black
Use white to place your text/logo in a new layer so it should look like this (except with your text lol):
Merge the visible layers (don't flatten or you'll lose the transparent background) and select everything white with the magic wand tool (click something white, right click and choose similar to get it all). If you have some parts above or below the black strip like I do you'll need to make them black. With the white selected you can easily do this with a soft brush (so it sort of fades in - use a hard brush if you prefer a definite transition). So it now looks like this:
Deselect and use the magic wand tool to get just the white selected again and delete it so you're left with a black image on a transparent background with the text/logo punched out.
Go to edit > define brush preset > give it a name and it'll be saved at the bottom of your brush list.
to use it open your photo make a new layer, select the brush, adjust the size to suit the image (the biggest you can make a brush is 2500px so if it is wider than that it won't reach side to side) and stamp it on (it'll be the foreground colour you have selected) reduce the opacity of the layer to suit taste and flatten the image.
I made this one a bit small (it is 2500px wide but only about 400 high) so you may want to make yours taller but you can always make the brush wider than the image to make it look bigger. On this image (DH's just had it open in PS already- I do all of his editing) I used the actual size at the bottom (with the brush at the same width as the image (533 px)) and one with the brush at 800px at the top, both in white and reduced the layer opacity to 35%, I'd usually lower it a little more but depends on how I plan on using the image.
If you want yours to be easier to read make it taller and use a bigger font.