As a matter of fact, it's even easier with IM. See Image and Text Watermarked Letters you can add any color text, at whatever position, with full saturation or semi-transparency, with Annotate.
Thanks for your reply too :) I was tempted to use Image::Magick - but I was lead to believe that its a bit more of a resource hog in comparison to GD (we're going to be serving about 1 million of the "script calls" a day - so every bit extra CPU isn't desirable :))