>As we sign up for new use account in www.yahoo.com, at the middle of the registration your are required to input the code you see at the image. It a sort of anti-Spam mechanism, my question is how to create this image dynamically? do you have any idea?

What you are talking about are "captchas". I don't know how you generate them but here is a page with some interesting information: http://sam.zoy.org/pwntcha/