A couple of problems when trying to set it as a watermark... When viewed in word the image i have used for the watermark looks really light, as though the opacity is at 70% and needs to be at 100% (the washout option is unticked so not selected.

Also when i created my images in illustrator it was done at a4 size, when used as a watermark i am needing to increase the size to 134% so it fills the document which is then causing the images to become pixalated, why is this and at what size should i be creating my document.

Thanks for the help so far, almost there now i hope....