Recaptcha shows two words. One that an computer scanner has scanned and recognized and one that the computer scanner cannot recognize. Recaptcha checks for the word it knows the answer to and saves the response for the unknown word. These responses to the unknown words are compiled and analyzed so that it is essentially "solved" by humans and not by the computer scanner.
Here's more info, in their own words:
"But if a computer can't read such a CAPTCHA, how does the system know the correct answer to the puzzle? Here's how: Each new word that cannot be read correctly by OCR is given to a user in conjunction with another word for which the answer is already known. The user is then asked to read both words. If they solve the one for which the answer is known, the system assumes their answer is correct for the new one. The system then gives the new image to a number of other people to determine, with higher confidence, whether the original answer was correct."
source - http://www.google.com/recaptcha/learnmore