Since it took me quite some time to resolve this problem, I hope this
post will be useful for someone else.
I am using the CAPTCHA gem in my application and always got the
undefined method `stringFT' for GD::Image:Class
It turns out that I was missing the GD libs for ruby. I'm on ubuntu, so
sudo install libgd-ruby
solved the problem for me.
I also found resources for OS X and Red Hat Enterprise Linux 4: