This feature is no longer supported or relevant because browsers now have spellchecking, and that's where it should be handled. You can add grammar checking to Firefox with http://www.afterthedeadline.com/
features, Tiki can automatically identify misspelled words and offer suggestions.
The language-specific dictionary used by the spellchecker is an additional database table that can be downloaded from Sourceforge and added to your database.
Q: Why does spellcheck flag all capitalized words as incorrect?
A: Because it has been broken for a long time. See this post from 2007.