The final problem I was having with the AuthImage plugin is now fixed.
I was having problems when a code was not entered, or was mistyped. When this situation occured you would get an error message. Upon hitting the back button, the page would rerender with the old image, even though internally the new code would be updated. You would then enter the old code again and validation would fail.
Apparently this happened in FireFox only. I found this article that showed a way to fix it.
I think everything is finally working as it should. This is the last known issue I had that I know of.
Of course, now that all of the issues are resolved, I find this site referred to by the author of the AuthImage plugin. This guy has apparently figured out how to break these kinds of authorization images (called CAPTCHA‘s). He hasn’t released any code into “the wild” yet, but if his web site is accurate in the progress he has made, this whole sense of security we are getting from the reverse turing approach could be short lived.