I am confident that this plugin works for normal (human) users. However, my problem is with the spambots. Even with this plugin installed and configured, spammers still were able to bypass it and create a blog without moderation.
Otherwise, it appears to play well with WordPress 3.0.5 and Buddypress 1.2.7
Thanks for the plugin. I still want and use it but I wish I could control the spambots also.