The ingenious crack is to offer a free porn site which requires that you key in the solution to a captcha -- which has been inlined from Yahoo or Hotmail -- before you can gain access. Free porn sites attract lots of users around the clock, and the spammers were able to generate captcha solutions fast enough to create as many throw-away email accounts as they wanted.
Now, chances are that they didn't need to do this, since optical character recognition has been shown to be readily tweakable to decode captchas without human intervention -- that which a computer can generate, a computer can often solve.
My cow-orker Seth Schoen points out that human-generated captchas are much harder to solve: say, picking out a photo of an animal, at a funny angle, in a cage, and challenging attackers to correctly identify it. People can do so readily, machines probably can't.
Except, of course, that getting people to pick out pix of animals at funny angles doesn't scale. Unless, of course, you offered them free porn to do so ("Want free porn? Identify the animal in this cage!").
Which suggests a curious future, where commodity pornography, in great quantities, is used to incent human actors to generate and solve Turing tests like captchas in similarily great quantities.