It is not at all surprising, that someone was able to defeat the captcha. Seems like Google and reCAPTCHA are better than the rest.
Full story here and here
24-Jan-2012: Unlike the automated captcha solvers, another popular method is to use actual humans to solve it. The actual humans are located in (cheap) resource intensive countries. Here is a very good post around how to setup on one of such services.
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