Creating an image upload bookmarklet using jQuery

Im trying to figure out how I can create a bookmarklet where the user first of all selects a website, then selects an image using an image they upload, this image will then be placed ontop of the website theyve selected, the user will also have the chance to position the image wherever they want on the page.

Has anyone had any experience in doing something similar to this or can recommend any good online material so I can get my head around the task?

Regards Kyle