Free watchface packs are available on the official website. There are new featured watchfaces almost every day.
The app allows creating a watchfaces in a super-simple way. All you have to do is choose a background image and an image for each of the dials - hours, minutes and optionally seconds, then send it to your Android Wear device.
Accessing the app's help section will explain what are the possibilities of the app and how it works.
You can choose a custom font, custom or built-in wallpapers, create shapes, set pivot points for images, use system variables, etc.