CAPTCHA aka "completely automated public Turing test to tell computers and humans apart" is awesome. It helps people (rather website owners) filter out real, lame and unsuspicious users from automated bots. The concept is very simple. They display a word, obscure it with putting some graphic effects, adding lines, dots etc. and then display it at the authentication point on a website. They assume that machines a.k.a. bots won't be able to read it and a human would be able to. To authnticate yourself, you need to read and decipher whats on it and enter your credentials.
I would agree to disagree here. Its ok that you skem the thing so bad that a machine can not read it but sometimes (more often than not), its obscured so bad that I have hard times reading it. I have to refresh the page 5-6 times to get a comprehensible image and proceed. May be I am a machine, may be I am a bot and may be its about time I got my eyesight checked?
There are arguments both in the favour and against the technology and since I hate CAPTCHA, I would tend to favour the ones against it ;)
A detailed discription can be found on Captcha and Wikipedia.