I did some checking around and found out that the evaluation copy came when I updated to sp1 (beta). You live and learn - don't put beta on an important computer. So to fix the problem, I went to control panel, remove programs and uninstalled it. After two or three restarts, the watermark was removed. I did winver and the sp1 was gone. I tried windows update, but it hasn't decided that I need SP1 yet so no upgrade to SP1 until Microsoft says so, or I get in a hurry again.
Windows Update is sporadic at best. For when you get impatient: Windows 7 SP1