Having used Photoshop 6 for several years it was only today that I discovered the "All Caps" feature - by accident! I was trying to add some text to a photo and it kept writing in CAPS only. My caps lock key was off, I shook all the dirt (!) from the keyboard to check the Shift key wasn't stuck, but it still persisted in writing in CAPS. Anyway, after a bit of searching around I discovered you could enable/disable this by doing the following:
In Photoshop, go to the menu Window > Show Character
Then in the Character window open this menu and disabe "All Caps" as shown in the image.
Hope that helps - in the meantime I still have no idea how I turned it on in the first place!