Yes, the CAPTCHA's for free users are horrrible, I can't disagree there.
However, as someone who's been a premium rapidshare customer for 2 years now since a friend referred me there and have absolutely 0 complaints about the service. It's truly fantastic. I've actually referred 2 friends to them, who've been members ever since.
Rapidshare is EXTREMELY fast, never goes down and "just works".
If I Want to see how fast an internet connection somewhere will work, I just download a 100+ meg file from Rapidshare.
The captcha images you see are as a free user.
You will never ever see these once you've got a premium account.
Do understand, that RS gets abused by 1000's of people every day, and so their captcha's are a response to a growing problem.
In 2006 they were really quite easy, and I"m sure the RS guys would rather concentrate on their business than adding cats to letters via imagemagick