can anyone tell me in simple steps how to add a txt based watermark to images (png based I can do).

Try http://www.zenphoto.org/news/text_watermark but since it is not supported no guarantee it still works.

ahh ok thanks will have a look, its just that in zenphoto admin/options/image/watermark there is a pull down option that says 'watermark-text' and puts a large 'T' on my images. I wondered if I could edit the 'T'

Those are all example images. You can put your own custom png24 watermark images within /plugins/watermarks/

cheers, and for your information that plugin does not appear to work for me, Its handy enough creating png myself though. Thanks for the explanation.