"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."
Article: http://blog.wired.com/monkeybites/2008/04/is-captchas-mom.html