When I copy the html to the Static Tab I get a red bar across the top that says "Template Contains the Script Tag" and the Opt In form does not display.

The script tag that's giving you problems is caused by the inclusion of a CAPTCHA form in your opt-in form. The script required for the CAPTCHA isn't compatible with the static html app. All you need to do in this case is just make sure to deselect the CAPTCHA form option when you're creating your opt-in form in your VerticalResponse account. The new html that you generate should work fine!