How to insert watermark in LaTeX

For my first post this year, I'll start off with something a bit different. This time we'll take a look at how to insert a watermark in a document using LaTeX. Note here that by watermark I mean some text that will appear on the background of each page of the document.
As with everything else in the wonderful world of LaTeX, there are more ways to do this. I know of two, which I will write about here. The first one is fairly simple, just include the package draftcopy and voila. Here's a minimal example of how it works:

\documentclass{article}
\usepackage{draftcopy}

\title{Lorem ipsum}

\begin{document}
\maketitle

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

\end{document}

Running the previous example through LaTeX gives the following output:

Note that running pdflatex on this example will NOT insert the watermark. I use LaTeX->dvi->ps->pdf route to obtain the pdf.
Of course the draftcopy package gives a lot of options to customize the watermark, of which I believe \draftcopyName is the most useful. If you want the word ENTWURF to be printed instead of DRAFT, which is used by default, you would add the line "\draftcopyName{ENTWURF}{155}" in the preamble. The number 155 is the scaling factor for the font---play around with it to get the scaling you want.
For those that like to do it the hard way (like me:) ), here is a piece of code that does pretty much the same thing:

          \AddToShipoutPicture{%
            \setlength{\@tempdimb}{.5\paperwidth}%
            \setlength{\@tempdimc}{.5\paperheight}%
            \setlength{\unitlength}{1pt}%
            \put(\strip@pt\@tempdimb,\strip@pt\@tempdimc){%
        \makebox(600,-700){\rotatebox{45}{\textcolor[gray]{0.75}%
        {\fontsize{6cm}{6cm}\selectfont{DRAFT}}}}%
            }%
        }

To use this code, you have to include the following packages: graphicx, eso-pic, and type1cm. Here is a minimal example:

\documentclass{article}

\usepackage{graphicx}
\usepackage{type1cm}
\usepackage{eso-pic}
\usepackage{color}

\makeatletter
\AddToShipoutPicture{%
            \setlength{\@tempdimb}{.5\paperwidth}%
            \setlength{\@tempdimc}{.5\paperheight}%
            \setlength{\unitlength}{1pt}%
            \put(\strip@pt\@tempdimb,\strip@pt\@tempdimc){%
        \makebox(0,0){\rotatebox{45}{\textcolor[gray]{0.75}%
        {\fontsize{6cm}{6cm}\selectfont{DRAFT}}}}%
            }%
}
\makeatother

\title{Lorem ipsum}

\begin{document}
\maketitle

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

\end{document}

Be sure not to forget the \makeatletter and \makeatother commands. Unlike with draftcopy, running pdflatex on this example WILL insert the watermark in the pdf. I find this code nice because I can directly tinker with the various options. For example, if I want to change the angle of the text, I'll change the number inside the \rotatebox, if I want to move the text around the page, I'll change the two numbers inside \makebox, if I want to change the grayscale, I'll change the number inside \textcolor, etc.
UPDATE: The above code, as Ivijay pointed out, puts the word DRAFT on every page of the document. If you want it to appear on only one, you should use the

AddToShipoutPicture*

instead of

AddToShipoutPicture

. This command only adds the watermark to one page (first one if you leave the watermark code in your preamble).

UPDATE: Neno wants to know how to use a picture instead of text. Well, it's just a matter of replacing the lines

\makebox(0,0){\rotatebox{45}{\textcolor[gray]{0.75}%
{\fontsize{6cm}{6cm}\selectfont{DRAFT}}}}%

with something like

\includegraphics{image.eps}

Of course, you might have to play around with adjusting the width and height of the picture, depending on its size. Also, you might want to change tempdimb and tempdimc to properly position the image.

UPDATE: hcr suggests using draftwatermark package to do this sort of thing. I've just had a look at the package, and using it really seems simple. For most of the things I did here, there is a nice command that does that. However, some things are missing from the package. First, the color of the text is always grey (you can choose the grey scale, but can't have the watermark text in, say, red. There does not seem to be a way to change the typeface of the font for the watermark text, and the text is always centered, you can't move it around. And finally, there is no way you could insert a picture as a watermark (which is what Neno wanted to do), and IMHO this could be a big issue for many people who may want their company's logo as a watermark. So anyway, draftwatermark is a great choice if you just want to insert a word (centered) in the background of each page. If you need anything more sophisticated than that, you will have to do something in the line of what I described here.

UPDATE: Amy wants to know is there a way to put the watermark only on some pages, preferably using something like \begin{watermark} and \end{watermark}. Well, Amy, there is no easy solution to your problem. One thing you could do is use \AddToShipoutPicture* that places the watermark only on one page, and then paste the code wherever you need it. Of course, this is ugly. I have managed to hack together some solution that seems to work, but the code is really ugly and I don't advise anyone to use it unless you really need to :). So, here goes:

\documentclass{article}

\usepackage{graphicx}
\usepackage{type1cm}
\usepackage{eso-pic}
\usepackage{color}
\usepackage{everypage}

\newenvironment{water}{\AddEverypageHook{\waterb}}{\AddThispageHook{\waterb}\AddEverypageHook{\watere}}

\makeatletter
\newcommand{\waterb}{
\AddToShipoutPicture*{%
            \setlength{\@tempdimb}{.5\paperwidth}%
            \setlength{\@tempdimc}{.5\paperheight}%
            \setlength{\unitlength}{1pt}%
            \put(\strip@pt\@tempdimb,\strip@pt\@tempdimc){%
        \makebox(0,0){\rotatebox{45}{\textcolor[gray]{0.75}%
        {\fontsize{6cm}{6cm}\selectfont{DRAFT}}}}%
            }%
}}
\makeatother

\makeatletter
\newcommand{\watere}{
\AddToShipoutPicture*{%
            \setlength{\@tempdimb}{.5\paperwidth}%
            \setlength{\@tempdimc}{.5\paperheight}%
            \setlength{\unitlength}{1pt}%
            \put(\strip@pt\@tempdimb,\strip@pt\@tempdimc){%
        \makebox(0,0){\rotatebox{45}{\textcolor[gray]{1}%
        {\fontsize{6cm}{6cm}\selectfont{DRAFT}}}}%
            }%
}}
\makeatother

\title{Lorem ipsum}

\begin{document}

page one

\newpage

\begin{water}
 First watermarked page
 \newpage
 Second watermarked page
 \newpage
 Third watermarked page
\end{water}

\newpage

This page should not be watermarked
\end{document}

Well, Amy, let me know if this works for you...