I don’t see watermark or compositing functionality in On2 Flix Pro and Macromedia/Adobe Video Encoder. I did read this weekend in the latest release of Premiere Pro C3 you can directly output Flash video. If this is the case then you could easily use Premiere Pro CS3 to watermark the video.
I don’t know of any way to do this on the fly, server-side. It would require that the video be decoded and re-encoded on the server. This is very expensive in both memory and CPU.
If you are worried that folks are going to steal your content using tools like Replay Media Catcher, then you might want to take a look at our new SecureToken functionality in Wowza Pro 1.2. Take a look at the Content Protection section of the Client Side Scripting chapter of the User’s Guide.