It looks like your Form Preset already includes captcha, there is no need to add it again.
If the captcha is not working when the form is initially created, adding another server validation instance wont fix it.
Recreate the form using the preset again, you shouldn't need to add captcha, it should already be there.
My Bet is that your server is not setting sessions properly. use the attached session test file to test the servers ability to save sessions. if the test fails, you will need to contact the host to correct the problem, it is most likely a bad session.save_path setting in the php.ini file.