Here's the Ars Technica article which does much better job explaining the system:
http://arstechnica.com/security/2012/05/google-recaptcha-bro...
http://arstechnica.com/security/2012/05/google-recaptcha-bro...
the youtube video in the OP does a great job of explaining and the thinking behind the attack, and even though it's an hour long, it's worth the watch.
Plain text wins again, at least for one-way technical communication.
I will never understand why people think that the crappy audio channel of a youtube video of some guy "umming" and gulping through a poorly prepared speech, all recorded on a $5 microphone, is a suitable way of passing information.