People take pics they find online (perhaps through google image search) and use them on their sites or in their banners without the artist's approval. If you add watermarks (see the faint text in the background behind the character, is what I assume she meant), it reduces the attractiveness of the pictures for these kind of uses, and it makes it more difficult to use in banners (the watermarks get in the way). It doesn't work so well against professional photoshop users though I guess.
But this is a reality on the internet, unfortunately. People don't care who originally drew a picture, they just take it and use it as they want, because in all honesty, the chance of getting caught is near non-existant, especially if the pics are only used on personal home pages or the like that only a limited amount of people ever see.
And I agree full-heartedly with Spiff
