I don't watermark as it typically looks ugly, and it's easy for art thieves to edit out. If I'm proud of what I've drawn, the most I'd do is add a signature somewhere where it isn't distracting. It won't stop somebody from stealing it, but there's little that can be done to prevent art theft in the first place.
I usually just add my signature to my work as well and just hope people are respectful enough to honor that.
I don't watermark, but I do signatures. I don't sign my little 100x100 sprites and animations as there is seriously no room for them, but sketches, final arts, and anything (else) I post online has my signature.
Ufortunately I've had to start watermarking. I don't like doing it, but art thieves are the worst kind of people.
I usually just add a shortened version of my art username somewhere visible but not in the road. I'm not worried about art theft as such because I can't control it, but adding the name can help some people to recognize my work.
I don't watermark because I feel like it can ruin the actual artwork. Also, my stuff's not even remotely worth steeling, so it's not really an issue.