Dear Martin,
do you have acces to the moodle directory through "FTP"? if so, upload your files by FTP to the folder /mod/certificate/pix/
both border and watermark can be the size of the certificate (IE: I use A4 = 2480 X 3508 pixels on 300 dpi) so I make sure the image is within that size.
the standard size of images that came with the plugin are 1024X831 (Fancy1) and 800X604 (Fancy2) for the borders and 380X380 (Crest) and 386X486 (fleurdelis) for the watermarks.
hopefully this helps