Very nice add on thank you

I've tested this for several months, didn't help one bit in preventing spammers from signing up on the forum. Might as well not have any spam verification

yep the yare getting by this with ease now

I use this in conjunction with CAPTCHA. I get maybe one or two registrations per week now. Obviously, they're having to manually sign up.

Just a question - what happens if the spammers use CURL or file_get_contents on every single image in order to get through to the registration form?

How can you stop someone using some of the proxy website to by pass the image verification?
Example:
proxify.com
hidemyass.com

is this mod no longer supported?

You can prevent known proxies from signing up by listing them in the banned list in vBulletin or by listing them in .htaccess (my preferred method). This will pretty much stop the majority of proxy signups, but not all.

where can I find a list of known proxies?

Google is your friend... Use the search term "list of known proxies". ;)