Currently there is a single watermark. This watermark is applied to all images. One way to solve the problem of having appropriate watermarks for different image sizes, and probably the easiest way is to simply have multiple watermarks, each with their own settings (since you can just iterate through nigh-identical form data for each watermark). Each watermark is checked to see if it applies (by size/format, as is done now for the single watermark) and applied to the image if so. This would also allow multiple watermarks, which I know some people are wanting.