The major topic of this dissertation is how to improve the image quality and application of digital watermarking techniques. Most traditional digital watermarking techniques focus on the development and improvement of embedding algorithm. But fewer people really care about the degradation of the image quality of digital watermarking techniques. Meanwhile, the application of digital watermarking technique seems to be limited in the copyright protection. Therefore, the techniques used to improve the image quality and to expand the application of digital watermarking technique are proposed in this dissertation. The concept of the proposed technique used to improve the image quality of digital watermarking technique is different from the concept of traditional watermarking techniques which directly modify the features of image to embed digital watermark. Dissimilarly, the proposed technique uses the relation between the features to embed the digital watermark. In this way, the probability of modifying the feature can be efficiently reduced. Therefore, the image quality of watermarked image can be improved. Besides, the proposed technique works like a pre-process. The proposed technique can be easily applied to present traditional digital watermarking techniques without changing the original embedding and extracting process. The expansion of digital watermarking techniques application consists of two techniques. The first one uses the digital watermarking technique to provide the ¡§Image Refining¡¨ function for digital images. In the proposed technique, the RS (Reed-Solomon) codes of original image are used as a watermark and are embedded in the original image. The watermarking information can provide the error correction capability while the original image is distorted (refining function). If there is some alterations made to the watermarked image and they are within the error correction capability of the RS parities, the alterations will be corrected by the RS decoding to restore the original image. The second one applies the digital watermarking techniques on the Pay-TV system. Conventional key distribution methods used in Pay-TV system emphasize on the method¡¦s refinement in order to reduce the frequency of the keys distributed over network. The proposed method uses the digital watermarking technique to hide the cryptographic keys into routine encrypted video program without any increasing of video program size for the economy of network bandwidth and degradation in perceptual quality. The purpose of this thesis is to improve the practicability of digital watermarking techniques. The proposed techniques could supplement the incompleteness of the traditional digital watermarking techniques with additional functions and applications. In this way, traditional digital watermarking techniques can not only be used for copyright protection but also be the new choice of resolving problem in the future digital environment.