I saw all the posts listing the same problem I had with the CB captcha not showing the image but having a red "X," image alt text and speaker image but no captcha letters displayed. Green for GD 2.0.34 Bundled and Freetype.
I goofed and installed captcha 2.0.1 instead of 22RC captcha on top of the 1.2.0 RC3 CB. Once I installed the correct captcha version, it worked like a charm.
My Incorrect filename: plug_cbcaptcha_2.0.1.zip
Correct filename: 22RC_plug_cbcaptcha.zip
Hope this helps someone.
Thank you Nick and team for such an excellent program with all the excellent add-ons and features.
~~Ray