It seems that when i upgraded to django v1.0 it broke the captcha as all template variables are now auto-escaped, whereas previously escaping had to be done explicitly this meant that you would see the html, the field is now marked as safe and so fixed! :)
This really does prove to me the value of testing as its been weeks since I upgraded, I never noticed because as a site admin I dont see it. Doh!
On a side note, i’m wondering what peoples opinion on captcha is? personally I see it as essential, and that re-captcha is the best, second only to googles own.