I've been breaking my head over this. I installed IH2 a couple of days ago. I have the watermark turned on for both small, medium and large images but only the the small ones display a watermark. I have created watermark.png and placed it in /images/large.

The watermark does show when I copy a picture gadget.jpg from /images to /images/large and rename it gadget_LRG.jpg.

Any clues? My site is www.mylittletoy.com.

Thanks