ImageMagick would be the preferred method, the caveat being that it's not always installed on servers.
What is the contents of the "/public_html/forum/images/captcha/backgrounds" folder on your server? There should be an index.html file and two images; if there is anything else in the folder it could be causing grief (same thing goes for the fonts directory under cache as well, only there are two font files and an index.html file).
