Adding Watermarking to WordPress function.php

In my theme that I am using for the thumbnails I want them black and white which I have done using Ottos function.php script. However when using a plugin to add a watermark to the colour larger images the b/w thumbs turn back to colour. The colour photos load in Prettyphoto when b/w clicked.

So I guess I have to add the watermark in the function.php however there is no where explaining how to do this.

So using a watermarking script and the b/w script I tried to merge the two… and you guessed it it stops the site from loading which is not surprising.

So my question(s) would be, has anyone done this? Will it actually work?

Thanks

Below is what I have tried so far…

add_action('after_setup_theme','themename_watermark');
function themename_watermark() {
    add_image_size('watermark-test-image', 500, 650, true);
}




add_filter('wp_generate_attachment_metadata','themename_watermark');
function themename_watermark($meta) {
    $file = wp_upload_dir();
    $file = trailingslashit($file['path']).$meta['sizes']['watermark-test-image']['file'];
    list($orig_w, $orig_h, $orig_type) = @getimagesize($file);
    $img = wp_load_image($file);




//watermark position
$p = $_GET['p']; if(!$p) $p = 'br';
/*
p can be anything from the following list:
tl = top left
tc = top center
tr = top right
cl = center left
c = center of the image
cr = center right
bl = bottom left
bc = bottom center
br = bottom right
*/
//watermarked image quality
$q = $_GET['q'];
//if the quality field is missing or is not on the 0 to 100 scale then we set the quality to 93
if(!$q || $q<0 || $q>100) $q = '93';


$filetype = substr($img,strlen($img)-4,4);
$filetype = strtolower($filetype);
if($filetype == ".gif") $image = @imagecreatefromgif($img);
if($filetype == ".jpg") $image = @imagecreatefromjpeg($img);
if($filetype == ".png") $image = @imagecreatefrompng($img);
if (!$image) die();

//getting the image size for the original image
$img_w = imagesx($image);
$img_h = imagesy($image);
//if the filename has 150x150 in it's name then we don't apply the watermark
if (eregi("155x194", $img)) {
    imagejpeg($image, null, $q); die();
} else {
    $watermark = @imagecreatefrompng('watermark.php');
}
/*
//if you want to use the watermark only on bigger images then use this instead of the condition above
if ($img_w < "150") {//if image width is less then 150 pixels
    imagejpeg($image, null, $q); die();
} else {
    $watermark = @imagecreatefrompng('watermark.png');
}
*/

//getting the image size for the watermark
$w_w = imagesx($watermark);
$w_h = imagesy($watermark);

if($p == "tl") {
    $dest_x = 0;
    $dest_y = 0;
} elseif ($p == "tc") {
    $dest_x = ($img_w - $w_w)/2;
    $dest_y = 0;
} elseif ($p == "tr") {
    $dest_x = $img_w - $w_w;
    $dest_y = 0;
} elseif ($p == "cl") {
    $dest_x = 0;
    $dest_y = ($img_h - $w_h)/2;
} elseif ($p == "c") {
    $dest_x = ($img_w - $w_w)/2;
    $dest_y = ($img_h - $w_h)/2;
} elseif ($p == "cr") {
    $dest_x = $img_w - $w_w;
    $dest_y = ($img_h - $w_h)/2;
} elseif ($p == "bl") {
    $dest_x = 0;
    $dest_y = $img_h - $w_h;
} elseif ($p == "bc") {
    $dest_x = ($img_w - $w_w)/2;
    $dest_y = $img_h - $w_h;
} elseif ($p == "br") {
    $dest_x = $img_w - $w_w;
    $dest_y = $img_h - $w_h;
}

imagecopy($image, $watermark, $dest_x, $dest_y, 0, 0, $w_w, $w_h);
imagejpeg($image, null, $q);
imagedestroy($image);
imagedestroy($watermark);

if ( function_exists( 'add_theme_support' ) ) { 
add_theme_support( 'post-thumbnails' );
set_post_thumbnail_size( 500, 650 ); // default Post Thumbnail dimensions (cropped)


}