Analysis of Printer Watermarking Techniques

It sounds like the watermark includes encoded info about the network, IP addresses, what have you. From one of Schneier's commenters, black-and-white printers have their own method, involving tiny imperfections in certain letters.

It reminds me of how Blizzard encoded info in World of Warcraft screenshots (user, ip, campaign, timestamp, realm, what have you).

Scary stuff. Makes you want to not take it seriously, almost as a mental defense mechanism.