Funny all you need is what *most of* you already have. (If you don't mind the manual labor, don't whine - this business is about hard *and smart* work, break a damn sweat already)
Windows Movie Maker (or any damn video maker probably preinstalled on your computer)
I've just used it yesterday with .mp3s ... as I always have.
How to watermark? First you need a picture....and your music file. (No FLVs allowed btw for those downloading youtube videos)
1) Drag and drop picture and mp3 file into Movie Maker (Guide for WMM)
2) Place them in the appropriate areas at the bottom (video/audio)
3) Select 'Titles and Credits' on the left hand side.
4) You have the option to make credits appear before, after or on(during) the movie. Select the option to make one on it.
5) Input your message, customize and then click add.
6) Make sure you stretch your picture and credits to the length of the song, simply click on the right side of the picture and hold until it turns blue (try to move your mouse first to find the two arrow cursor that appears when you've hovered over the side) Simply pull to your desired length, it will snap into place when you get near the length of the song.
7) Click publish and enjoy your new file, ready to upload.
Tip: When repeating the process, go back to edit the credits, the text will revert back the smallest size for some reason every time you publish a movie.