Index: Image.php
===================================================================
--- Image.php	(revision 16097)
+++ Image.php	(working copy)
@@ -1655,7 +1655,10 @@
 		$suppressRC = true; // There's already a log entry, so don't double the RC load
 
 		if( $descTitle->exists() ) {
-			// TODO: insert a null revision into the page history for this update.
+			// Bugzilla #778: Image upload replacements should create watchlist entry
+			$currentRevisionID = $article->getLatest();
+			$nullRevision = Revision::newNullRevision( $dbw, $currentRevisionID, $desc, false );
+
 			if( $watch ) {
 				$wgUser->addWatch( $descTitle );
 			}