Maybe if it was installed after the fact you need to reboot the server.
But anyway you can goto the ubb control panel.
Control Panel » PHP Info
All it does is run phpinfo for you.
If you scroll down or search for GD you will see if it is really enabled.
This is not a fancy screen print but it should look something like:
gd
GD Support enabled
GD Version bundled (2.0.34 compatible)
FreeType Support enabled
FreeType Linkage with freetype
FreeType Version 2.2.1
GIF Read Support enabled
GIF Create Support enabled
JPG Support enabled
PNG Support enabled
WBMP Support enabled
XPM Support enabled
XBM Support enabled

Quote
BTW, The requirements state:
CAPTCHA requires GD2 with FreeType to be available to PHP, or ImageMagick 6.

Blue Man Group
There is no such thing as stupid questions. Just stupid answers