On the Utah PHP Users Group website today, there's a quick new tutorial concerning the creation of a CAPTCHA image for your site (using the GD functionality in PHP).
The following article includes code and examples on how to prevent bots from taking part in online polls, registering for free email accounts, more recently, preventing bot-generated spam by requiring that the (unrecognized) sender pass a CAPTCHA test before the email message is delivered [implemented in Yahoo]. They have also been used to prevent people from using bots to assist with massive downloading of content from multimedia websites.
First, they create the form the entire example centers around before even looking at the code. With that laid down and explained, they get into the image creation and addition of the string to make the "humans only" image. Finally, they show how to check the word entered for the CAPTCHA verification against a session variable to see if they're a match.