In theory, only an actual human being can figure out what word is in the Captcha graphic. The letters are just twisted enough and the background is just cluttered enough that a person can read them, but not a computer. Good guys in, bad guys out—the perfect barrier.
In practice, Captchas have just replaced one public nuisance with another. First of all, the images are often so distorted that even a human can’t read them. That’s a particular problem in nonsense words like “rl10Ozirl.” Are those lowercase Ls or number ones? Zero or letter O?
On one of the sites I maintain, I was getting a lot of spam on our registration form. I tried a couple of different kinds of these things (including reCAPTCHA) and not one of them kept spammers away. Maybe it slowed them down, but in my experience these things are easy enough to crack.