Leosghost - 9:10 pm on Mar 4, 2013 (gmt 0)
Interesting..I've just noticed that if one clicks on the "large" image to the left..one is taken directly to the website that G are hotlinking it from..
Also that images that show up in the 8 "thumbnails" to the right..contain many which are watermarked..watermarking does not appear to "demote" images..and the large image now leads directly to the site..whereas for a while there..a click on the large image resulted in it opening in isolation but not onward to the actual site page..
So..as watermarking is more likely to encourage those who are looking for images ( other than tire kickers, thieves and pinteresters etc ) to click the image..a click to visit message on the images ( if you allow G to index your images ) would not appear to be penalising images in G image search..
At least..for now..