Since MacOS X 10.3 it is possible to format a disk with case-sensitive HFS+ partitions. But unfortunally this brings some pitfalls.
On a case insenitive filesystem the files text.txt and TeXT.txT would be recognized as the same. On a case-sensitive filesystem these filenames reffer to different files. It is also possible to have them both. Apple wrote once a technote for 10.3 Server which tells you to not format youre startup disk as HFS+ case-sensitive volume. The problem is that in some programs (to my knowledge it is only a Carbon problem, as in Cocoa filenames during the compiling are checked case-sensitive anyway) the developer wrote code reffering to, for example, Carbon.framework but the filename is Carbon.Framework etc. Another even more critical problem is with backup tools. If they are programmed not case-sensitive the file TeXT.txT and text.txt will backup into the same file which obviously is no good.
However this was two years ago, backup tool programmer updated their tools and actually we have 10.4. BUT there are still some problems with this. I regularly come across dashboard widgets that do not work for me. Because of my case-sensitive filesystem. If for example the Info.plist file inside the widget is named info.plist MacOS will not recognize the widget and will refuse to install the widget. Or if the filename of a picture is written differently in the HTML code than the actual filename is, the picture is not displayed. So, developers be careful; check youre code; don’t break youre widgets.