I gave up on watermarks, cause the only way you can either ruin the whole photo by plastering it all over, or put it somewhere inconspicuous, where it's easily removed. I just limit my uploads to 1024x680, since that's quite useless.
The kind of person who is savvy enough to remove a watermark is the kind of person who probably won't bother to actually pay money, anyway. Today's youth and young adults (and that includes myself) have grown up in a culture where most intangible things don't have any real value. I'm not complaining, I think it's a good thing.
Also, I limit my photos to 500px on the long side (~800px for a panorama). Photos look better if you can enjoy the entire composition while sitting two feet from your screen instead of being able to fuss over minor and unimportant details.