How do I duplicate the Julieanne Kost watermark procedure

First, I must explain I am a beginner and have been having difficulty executing a successful watermark procedure, specifically making original line drawing art a watermark. I recently ordered Photoshop For Dummies online.
The best help I have found is Adobe TV "The Complete Picture with Julieanne Kost".
The program is located here: http://tv.adobe.com/watch/the-complete-picture-with-julieanne-kost/psc5-creating-transpare nt-logos-for-watermarks-and-overlays-in-photoshop/
It is the last five or six minutes describing making a handwritten signature into a watermark overay that I am attempting to learn. I am not sure what I am not doing right. Julieanne is taking a pixel drawing of her signature and with the move tool pastes the signature image right over the photo with white background and all. She then removes the white background by clicking "multiply".
Howerver, closer observation shows that these are already converted into "psd" I tried to do the same procedure by using jpg and a jif. I was not able to use the move tool to take the signature and move it to paste on the the jpg image.
How do I change the jif image and the jpg photo into psd documents? Is that where I am having diffuculty?
What I ultimately want to do is take a artwork drawing with a white backfround and make it ito a watermark and overaly it onto a photo image. I also want to adjust the opacity of the watermark.
Julieanne Kost is doing a procedure that is very close to what I want to do.
Thank you.

Is this the correct link:
http://tv.adobe.com/watch/adobe-evangelists-julieanne-kost/pscs5-creating-transparent-logo s-for-watermarks-and-overlays-in-photoshop/
The format (jpg, tif, psd) is utterly irrelevant.
Just make sure that, with the Move Tool selected, you click on the thumbnail in the layer of the source image in the Layers Panel and drag that right onto the open document of your target document.
That's all.
Wo Tai Lao Le
我太老了

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