Artists new to the online art world are sometimes a little hesitant to put their images out there, fearing unauthorized use and distribution of their artwork. But there is so much opportunity for positive exposure on the internet that it would be a shame not to take advantage of it because of this concern.
There are several things you can do to help protect your images from unauthorized use. Watermarking is the probably one of the oldest and most common forms of protecting images. It won't stop people from downloading your image but it will make it unusable for printing or trying to take credit for the work. People are also less likely to want to download it when there's an obvious watermark on it. Here is an example of a typical watermark:
Not very pretty, though, is it?
Another option is to "shrink wrap" your image which is a way of putting a fake transparent image over the real image so when someone tries to download your image they think they're getting the real thing when, in fact, they are getting the transparent image. You can find out how to do this here on About.com.
Personally, I don't do any of these things, really. People distributing my art all over the web just means more exposure for me. The trick is to make sure my name and web address stay with my image so the free publicity does me some good so I add my name name and web address into my images directly. I guess you could call that a form of watermarking but it doesn't obscure the image the way the typical watermark does. Here's how mine looks:
You might argue that if someone wants to steal your artwork they could simply crop the name and address off the bottom. Well, yeah, they could. But I think the vast majority of people who download and distribute your images do so simply because they like it and want to share it with friends. I don't think they're trying to take the credit away from you and are unlikely to go to the trouble to crop the image. Names and links to the sources of images are usually just lost out of carelessness and lack of web page editing skills.
To discourage those who might actually want to steal credit for your work, or print it out, I suggest simply keeping your images low resolution and low dpi. Keep the dimensions smaller than 500 pixels and keep the dpi below 96. You can also add a 10-20% jpg compression which will further degrade the image. On your computer screen these adjustments won't affect the image much and it will still look decent on your web page. If your image is, say, 400 pixels wide at 72 dpi then when someone tries to print it out on their computer printer it will only be about 5 inches wide and won't look too great. Should they try to force it to fill the page in an attempt to get an 8"x10" print it will look downright horrid at that resolution and dpi. Maybe they'll be satisfied hanging that crappy postcard sized print on their wall but they certainly won't get away with trying to sell them as fine art prints to anyone but a blind person.