Using plugin version 1.2
First error message was that folder didn't exist or wasn't writeable, so I verified that I do indeed have the GD and FreeType PHP libraries installed on my server, then I manually created the folder where it should be (in my images folder, which is my default per my WP settings) and I verified that permissions are in fact writeable (CHMOD 755), but the error message would not go away, nor would my images show up.
So I added the line to my wp-config.php file per the documentation for this plugin:
define( 'WPCF7_CAPTCHA_TMP_DIR', '/images/wpcf7_captcha' );
Still got the error message and no images showing up.
I tried using the full URL in the path (e.g. http://www.mysite.com/images/wpcf7_captcha) but that generated a PHP error (fopen).
So I've removed the captcha fields from my contact form, but I'd really like to get this resolved.
What might I be missing?