Your website graphics are easy to steal. Visitors automatically get a copy of every image on your web page just by visiting your site. Take a look in your Temporary Internet Files folder!
You can't prevent this, but a watermarked image will help discourage unauthorized use of your intellectual property.
Turn hotlinking to your advantage!
Not much you can do to prevent other websites from hotlinking to your images, but you can turn the situation to your advantage by putting your URL in a watermark! Now every time your watermarked image appears on somebody else's page it's advertising your website and driving traffic back to you!