There are many open sourced / freeware utilities available for generating Captchas.
At Cloudglow, we evaluated the following for one of our GAE application:
1. JCAPTCHA (available for download at http://jcaptcha.sourceforge.
Most of the links provided on this site were not working at the time of our evaluation. We were too reluctant to test something which didn't have main links on this site working. We will get back to it sometime when the site is back in operation.
2. SimpleCaptcha (available for download at http://simplecaptcha.
Simple captcha is a very simple and powerful utility to generate captchas. We followed SimpleCpatcha's installation and test instructions ( available at http://simplecaptcha.
3. ICPATCHA (available for download at http://code.google.com/p/
ICAPTCHA uses I/OStreaming which is again not listed on GAE's whitelisted classes. Hence there was no point going any further.
4. RECAPTCHA (available for download at http://recaptcha.net/)
Recaptcha is another free and popular captcha service. This will add a dependency on their service which we do not want to have. You can refer to http://gaejexperiments.
In summary, we are back to the drawing table and may end up doing a simple mathematical captcha. Guess it is good enough for now.