Actually, it's the other way 'round - Word recognizes the capitalised forms of words added to the dictionary in lower-case form. If you input only a capitalised form, Word will regard the lower-case form as an error. This makes sense, as company names and the like sometimes use a mix of capital and lower-case letters and getting the capitalisation wrong amounts to an error.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]