"For the last few years, Captcha, the Completely Automated Public Turing test to tell Computers and Humans Apart, has been one of our main lines of defense against the machines that want to impersonate us.
Recently, though, the various most popular Captcha implementations have been cracked. Bots with character-recognition ability have gotten pretty reliably good at figuring out what the distorted text says. That means they can sign up for Gmail, Yahoo, and Windows Live accounts automatically, and use those accounts for their own malicious purposes -- typically to send spam.
Websense has an interesting analysis of the cracking of the Windows Live Captcha."