I’ve seen ideas similar to that before. I think [PlayThrus](http://areyouahuman.com/ “PlayThrus by Are You a Human”) are a slightly more elegant approach (despite the obnoxious name).
I’ve also seen a lot of people merely an input that says something like “Which is warmer, ice or steam?” From purely a useability perspective that isn’t the worst thing you can do, but it won’t necessarily stop all the bots either. Then again, neither to Captchas.
It works on my iPhone. That was surprising. Normally stuff like that fails with touch devices. I like it. The only problem I would have is that would never go well with any of my form designs. I too hate the image captchas. I use a simple math question. This one here just gives random addition questions using number 1 through 5. http://www.websitecodetutorials.com/code/php/simple-php-captcha.php
Which is why most of them are ridiculous. I’m fine with akismet, and a good honeypot, but starting to move away from requiring a user to work harder just to submit a form. We should be making it easier for users, not harder. Web usability 101.