It then sets the image's transparent color to the color of the pixel in the upper left corner. This pixel should have the image's background color, as should any other pixels that you want to be transparent in the result.

The program then copies the watermark image onto the result image.

' Copy the watermark image over the result image.
Private Sub DrawWatermark(ByVal watermark_bm As Bitmap, _
    ByVal result_bm As Bitmap, ByVal x As Integer, ByVal y _
    As Integer)
    Const ALPHA As Byte = 128
    ' Set the watermark's pixels' Alpha components.
    Dim clr As Color
    For py As Integer = 0 To watermark_bm.Height - 1
        For px As Integer = 0 To watermark_bm.Width - 1
            clr = watermark_bm.GetPixel(px, py)
            watermark_bm.SetPixel(px, py, _
                Color.FromArgb(ALPHA, clr.R, clr.G, clr.B))
        Next px
    Next py

    ' Set the watermark's transparent color.
    watermark_bm.MakeTransparent(watermark_bm.GetPixel(0, _
        0))

    ' Copy onto the result image.
    Dim gr As Graphics = Graphics.FromImage(result_bm)
    gr.DrawImage(watermark_bm, x, y)
End Sub

You may want to try other alpha values. For example, 64 produces a more subtle result.