I wanted this component mainly to use with the PerForms forms component. I questioned it due to the reviews about having to hack core Joomla files. However, I discovered that those hacks are not required. They are only needed if you want to add CAPTCHA to core components such as com_contact, com_register and com_login. Anything outside of that requires no core hacks.
I also discovered that you need to set the security image component directories to 755 instead of 777 for it to work in PHP5. Now, it works just fine. Thanks!