Blake, I wrote a post over on DealerRefresh way back in the day about this.
Spice up your Vehicle Inventory Photos
I always use the Faststone Photo Resizer for my overlays. It's a quick and simple program and it allows your to batch overlay your photos. It's free too (for personal use).
Another alternative would be
Picasa . It too has an overlay feature but not very robust.
I recommend overlaying a CarFax 1 Owner logo or a "Spotlight Special" inside of a red starbust graphic on all my AutoTrader Spotlights. It really made the ad stand out from the crowd.