Initial Caps refers to writing a sentence where every single word has the first letter capitalized.

This Would Be An Example Of An Initial Capped Sentence.

Of course while this kills readability on long (or perhaps even short) documents, it makes good looking* headlines and titles. By stating initial caps, it is generally implied that it does include the words a, and, and the.

By using initial caps, the reader's eyes have to move up and down very quickly, increasing strain, and slowing the rate of reading. Generally titles and headlines are used with initial caps.

As lj pointed out: Initial Caps are also used in computing jargon, mostly for emphasis, such as in A Good Thing, Problems, The Right Thing, etc.

* Of course, this is up for debate.

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