Coding Horror blog had a posting asking "Has CAPTCHA Been "Broken?". The basic answer is "no", but some implementation of Captcha can be readily defeated. Coding Horror showed a chart from a Chinese site of several catpchas types and their difficulty to defeat. The chart shows that some captchas are very diificult to with OCR techniques.

Good discussion on defeating captchas at Schneier on Security. Some of the comments have good links for more information. One of the links is for an article of a method to "outsource" Captcha responses with a little social engineering.

Then there is PWNtcha, an open source Captcha decoder.The PWNtcha page has a chart examining the strentghts and weaknessness of various Captchas.

J.D. Abolins