An　adaptive　watermarking　capacity　analysis　in　the　spatial　domain　and　wavelet　domain　is　proposed.　The　relationship　between　the　watermarking　capacity　and　the　watermark　detection　error　rate　is　also　discussed.　The　research　of　watermark　detection　error　rate　will　help　us　finding　the　ways　to　embed　more　watermark　messages　while　keeping　an　acceptable　detection　error　rate,　and　it　is　useful　for　the　design　of　the　general　algorithms　of　watermarking　and　detection.　The　watermarking　system　is　analyzed　based　on　the　channel　capacity　and　error　rate　of　the　communication　system,　and　the　relation　between　the　detection　error　rate　with　the　capacity　and　payload　capacity　is　derived.　According　to　the　experimental　results,　the　detection　error　rate　of　watermark　is　mainly　influenced　by　the　watermark　average　energy　and　the　watermarking　capacity.　The　error　rate　rises　with　the　increase　of　watermarking　capacity.　When　the　channel　coding　is　used,　the　watermarking　error　rate　drops　with　the　decrease　of　the　payload　capacity　of　watermarking.　(c)　2006　Elsevier　B.V.　All　rights　reserved.