This week, NuCaptcha launched a video captcha offering. They have solved the readability and sweat labor issues that have come about. It's a true security offering that also improves input accuracy to 99%.
Disclosure: I've advised with NuCaptcha on a pro bono basis.
Granted, the current state of the captchas™ is kinda bad.
you don't even appear to need flash, the swf apparently just downloads an mp4 that's actually just a concatination of flash params exposed in the initial page request. from there one would be able to crack the captcha even easier by using the fact that the captcha persists across many frames of the video in various orientations/perturbations (the first character is touching the second character on top for half the video and then on the bottom for the other half, or so for example)
gasp there's in addition to the mp4 and a completely different gif served with each request (To offer support for those without flash installed, of course!) that would provide even more data for figuring out the three red letters that persist across most frames of both animations...... :(
edit--the three combinations of letters(captcha solution) across the mp4 version, the gif and the mp3 appeared to all be different
voice recognition against the mp3 would be fun
Using Flash for a Captcha seems like overkill. They couldn't come up with a more lightweight Captcha?
(And the obligatory: Hooray unspecified chemically laced beverage!)
If you want to plug something on HN, first you need to disclose that you are doing some advertising. (kudos, you did this) And second, you need to explain, without weasel words, how and why it's a good solution for the problem.
Example of me plugging mongodb despite it only being marginally to the topic: http://news.ycombinator.com/item?id=1471516
[Deleted previous comment because I misremembered the thread I was replying to when I wrote it]