I just updated to the latest CAPTCHA control 1.3 by Miguel Jimenez  from version 1.2.   The upgrade was EXTREMELY seamless, just dropped the .dll in the \bin folder and removed the HttpHandler from the web.config...that was it!

It's great to see other .NET developers contributing such quality stuff to the community.  I was experiencing the error in which the HttpHandler would cause the browser to prompt to save a file rather than allowing a user onto the site...nice to see that one fixed.  This is great stuff Miguel!