I could not see watermark when i downloaded a transcoded file and viewed it from my desktop. The same video shows watermark when played from your server. My understanding was that the watermark gets imposed on the video when it is transcoded. Please correct me if i'm wrong. Thanks.
You can control watermarks in two places; the player and in the video themselves.
To have the watermark burned into the video, you will need to edit all your templates to include the watermark.
You can control your templates in the account tab.