Here from DRM Watch, a good short article on the use of watermarking in video:

Without the ability to include the purchaser's identity in the watermark, the value of watermarking in preventing piracy is in its ability to automate the process of detecting unauthorized files on P2P networks and taking steps to have the files removed... As an anti-piracy mechanism, watermarking is complementary to DRM but at best serves as a backup in case the DRM is hacked... It is a good thing for USVO that its technology is gaining acceptance before the two next-generation optical disc technologies (Blu-ray and HD DVD) become established. Both of those formats have content protection technologies that are much stronger than the current CSS encryption scheme used in DVDs. The movie studios may consider these to be adequate and not feel the need to use watermarking for consumer distribution as well, despite its complementarity to encryption-based methods.