A small cap letter is an uppercase letter that's about the same height as nearby lowercase letters. I first noticed them in Business Week about ten years ago, and found them disconcerting.
They are frequently used for decorative effects at the beginning of a block of text, and as abbreviations and acronyms like USA, FBI, SCUBA, RADAR, A.M. and IBM. I can't reproduce small caps with online text. so I put sample material down below.
The theory behind small caps is that they blend in well with surrounding text instead of SHOUTING AT THE READER like full-size caps. The use of small caps is supposed to be a sign of sophisticated typography, like hanging punctuation (which I may deal with in the future).
There are several problems with a few letters in small caps.
- They look stupid at the beginning of a sentence. Sometimes a sentence can be reworked to avoid the problem. Some typographers switch to full-size, others keep the small caps up front. I prefer to rewrite.
- If you have the names of two competing entities nearby, and one has normal lettering and one has small caps, there is an implicit downgrading of the one with small caps. USA looks less important or powerful than Canada. B&N is dominated by Amazon. HP and IBM are overpowered by Dell.
- If you have a compound name like "U.S. Capitol," "U.N. Building" or "PR Newswire," it looks silly for the "U" or the "P" to be smaller than the first letter of the next word.
- A title like "HTML Guide" would look silly if "HTML" was smaller than the "G."
I avoided small caps in my first nine self-pubbed books, but as I tried to get "more professional" I started to use them in book #10, Get the Most out of a Self-Publishing Company: Make a better deal. Make a better book. After several hours, I got so frustrated trying to resolve inconsistencies, I gave up and went back to full-size caps.
If you have a lot of time to kill and are a graphic masochist, you can try using small caps. I doubt that I'll try them again.