Requirements :
You will need PHP and GD Graphics Library library installed. To see if you have gd installed on your server, create a file named info.php, plece the following content in it:

<?php
phpinfo();
?>

It should appear a page with infos and you can find if you have gd installed or not.

A few rules :
1. Place an info message to instruct the user what to do.
2. Do not use too many letters! You want to secure your form, not to annoy the user.
3. A hack to this security measure is using OCR systems to "read" the text image. Use different types of fonts, rotate them in different angles and use a background image to prevent that.

The code explained:

Create a php file random_image_sample.php. This file will generate the an image with a random 5 letters text.

//random_image_sample.php contents

//start a session
session_start();
//this function is called recursivelly
function random_string($len=5, $str='')
{
  for($i=1; $i<=$len; $i++)
   {
    //generates a random number that will be the ASCII code of the character. We only want numbers (ascii code from 48 to 57) and caps letters.
    $ord=rand(48, 90);
    if((($ord >= 48) && ($ord <= 57)) || (($ord >= 65) && ($ord <= 90)))
        $str.=chr($ord);
    //If the number is not good we generate another one
    else
        $str.=random_string(1);
  }
  return $str;
}

//create the random string using the upper function (if you want more than 5 characters just modify the parameter)
$rand_str=random_string(5);

//We memorize the md5 sum of the string into a session variable
$_SESSION['image_value'] = md5($rand_str);

//Get each letter in one valiable, we will format all letters different
$letter1=substr($rand_str,0,1);
$letter2=substr($rand_str,1,1);
$letter3=substr($rand_str,2,1);
$letter4=substr($rand_str,3,1);
$letter5=substr($rand_str,4,1);

//Creates an image from a png file. If you want to use gif or jpg images, just use the coresponding functions: imagecreatefromjpeg and imagecreatefromgif.
$image=imagecreatefrompng("images/noise.png");

//Get a random angle for each letter to be rotated with.
$angle1 = rand(-20, 20);
$angle2 = rand(-20, 20);
$angle3 = rand(-20, 20);
$angle4 = rand(-20, 20);
$angle5 = rand(-20, 20);

//Get a random font. (In this examples, the fonts are located in "fonts" directory and named from 1.ttf to 10.ttf)
$font1 = "fonts/".rand(1, 10).".ttf";
$font2 = "fonts/".rand(1, 10).".ttf";
$font3 = "fonts/".rand(1, 10).".ttf";
$font4 = "fonts/".rand(1, 10).".ttf";
$font5 = "fonts/".rand(1, 10).".ttf";

//Define a table with colors (the values are the RGB components for each color).
$colors[0]=array(122,229,112);
$colors[1]=array(85,178,85);
$colors[2]=array(226,108,97);
$colors[3]=array(141,214,210);
$colors[4]=array(214,141,205);
$colors[5]=array(100,138,204);

//Get a random color for each letter.
$color1=rand(0, 5);
$color2=rand(0, 5);
$color3=rand(0, 5);
$color4=rand(0, 5);
$color5=rand(0, 5);

//Allocate colors for letters.
$textColor1 = imagecolorallocate ($image, $colors[$color1][0],$colors[$color1][1], $colors[$color1][2]);
$textColor2 = imagecolorallocate ($image, $colors[$color2][0],$colors[$color2][1], $colors[$color2][2]);
$textColor3 = imagecolorallocate ($image, $colors[$color3][0],$colors[$color3][1], $colors[$color3][2]);
$textColor4 = imagecolorallocate ($image, $colors[$color4][0],$colors[$color4][1], $colors[$color4][2]);
$textColor4 = imagecolorallocate ($image, $colors[$color5][0],$colors[$color5][1], $colors[$color5][2]);

Write text to the image using TrueType fonts.
$size = 20;
imagettftext($image, $size, $angle1, 10, $size+15, $textColor1, $font1, $letter1);
imagettftext($image, $size, $angle2, 35, $size+15, $textColor2, $font2, $letter2);
imagettftext($image, $size, $angle3, 60, $size+15, $textColor3, $font3, $letter3);
imagettftext($image, $size, $angle4, 85, $size+15, $textColor4, $font4, $letter4);
imagettftext($image, $size, $angle5, 110, $size+15, $textColor5, $font5, $letter5);

header('Content-type: image/jpeg');
Output image to browser
imagejpeg($image);
Destroys the image
imagedestroy($image);

The html file random_sample.html is a sample of how to use the random image.

<?php
session_start();
?>
<HTML>
<HEAD>
<TITLE>Random image sample</TITLE>
<META HTTP-EQUIV=\"Content-Type\" CONTENT=\"text/html; charset=iso-8859-1\">
</HEAD>
<BODY>
<?php
$errors=0;
if(isset($_POST['Submit']))
{
$number = $_POST['number'];
if(md5($number) != $_SESSION['image_value'])
echo '<h1>Validation string not valid! Please try again!</h1>';
else
{
echo '<h1>Your string is valid!</h1>';
//do something with the data
}
}
?>
<form name="form1" method="post" action="random_sample.php">
<table cellspacing="0" width="600" align="center">
<tr><td valign="top" align="right">Comments</td>
<td><input name="message" size=40 value="...your message here">
</td></tr>
<tr><td colspan=2 align="center">
<font size="1" face="Geneva, Arial, Helvetica, sans-serif"><strong><font size="2">
Please enter the string shown in the image in the form.<br> The possible characters are letters from A to Z in capitalized form and the numbers from 0 to 9.
</font></td></tr>
<tr><td align="center" colspan=2><input name="number" type="text" id=\"number\"></td></tr>
<tr><td colspan=2 align="center"><img src="random_image.php"></td></tr>
<tr><td colspan=2 align="center"><input name="Submit" type="submit"
value="Submit"></td></tr>
</table>
</form>
</BODY>
</HTML>