watermarking then saveing the watermarked image?

[thehigherentity]

I am in the process of making a website were people will beable to upload images and write a little bit about the image. At the moment i have functions made that will upload the image then reseze the image and create a thumbnail, what i want to do next is add a perminent watermark to the image, IS THIS POSSIBE?

I have tried to figger this out myself and only managed to creat images with watermarks that are only there while the image is displayed, this would be great if they didnt use a header call such as
header("Content-type: image/jpeg"); or
header("Content-Disposition: filename=" . $image);

my problem is once i load some text to the screen alonge with this image the who page is destroyed with heaer already set errors or my text is jumbeled into the image.

So basicaly, im after some advice, is there a way i can add a perminent watermark afer i have uploaded the image or is there a way to merge two images on screen and still beable to add more test and images too ?

a little more info just incase its needed, I am only allowing gif and jpg files to be uploaded and my watermark image is png, I dont know if this makes any differeace?

Thanks for any help u can give me...