I've posted a new build for Simple Gallery in the downloads section (members only).

New Functionality Includes:-

• Ability to apply image watermarks (as opposed to text). You can:-
  • Enable in settings -> gallery settings -> compression settings
    • "Use Watermark?" and a "Watermark Image" must be selected to apply watermark on new images.
  • Control where the watermark is applied (top left, top right, bottom left, bottom right)
  • See an example in this album.

Thanks again for all your feedback!