What should i use to watermark images in WordPress 3.0.1?

There are quite a few plugins available, and a lot of them are compatible with WP 3:

http://wordpress.org/extend/plugins/search.php?q=watermark

When looking at a plugin page, don’t take the “Compatible up to:” statement at face value. It’s the developer’s responsibility to update this value, so it doesn’t necessariy mean that the plugin is incompatible. Look below that at the “Compatibility” section where actual users report whether or not the plugin works for them on their version of WordPress.