How does it protect from spam?

It's hard for spam-robots to read.

Do you mean spams are always sent by automated robots?

Most of spam, but certainly not all, is created by robots. Such tools significantly cut back on spam but an individual spammer can get around them by manually posting. And of course as the spammers get more sophisticated, they find ways to "crack" the encoding tools so that their robots can prefill, which is why there are so many types of visual verification tools (the letter and number combinations, select a particular picture, etc.).

spam-bots and "spiders" which crawl through webpages looking for email addresses.

http://en.wikipedia.org/wiki/Captcha

stevem I was going to post "turing test" but looked up your link and there it was-

This is a special (reverse) form of the turing test.

Thanks for the insight.

milo