Case-sensitive Mac OS X File System in Panther
As noted by a MacBidouille reader... the most recent betas of Panther have implemented a formatting option for a case-sensitive Mac OS Extended file format.
Historically, Mac OS file systems have been case-insensitive but case-preserving, meaning that while capitalization is preserved in filenames, they were not used to to distinguish filenames.
Example: "Hello.txt" and "hello.txt" are considered to be the same filename in case-insensitive file formats.
Case-sensitive file formats consider "Hello.txt" and "hello.txt" to be two different files which may coexist in one directory. While this may appear confusing to some, most Unix filesystems (except Mac OS X) behave in this manner.
The additional option is available under the Panther Disk Utility and is called "Mac OS Extended (case sensitive/journaled)".