Ultra-compact with fast data transfer rates, the Type M xD-Picture Card
is currently available with up to 2GB of storage capacity.
Not only do they support the exclusive Olympus Panorama option, they
also activate art effect functions including 3D, oil painting, cartoon
and watercolor. These extra functions which are used in conjunction
with the software provided with your camera will add fun and creativity
to your photography.
So just to clarify, you have a TYPE M XD PICTURE CARD, MADE BY OLYMPUS.
And an Olympus mju770 SW. Now, it is the software on your computer that is going to allow you to make any changes. So first, you need to open that software. Connect the camera to the computer via USB, and voila, extra functions within the software will activate and allow you to edit the pictures with special effects like watercoloring, etc.
You know, you could also achieve the same result by using a powerful image editing tool like Photoshop CS3 or even go back as far as Photoshop 7.0. Or Microsoft Photo Editing can add those effects, and that's free with any XP machine.