case sensitive thanks to POSIX compliance. You can read more about it in
from Microsoft's Knowledge Base. The Windows system calls and APIs do by default behave in a case preserving manner. But you are confusing what Windows allows you to normally do with the actual filesystem. I say "by default" because with some registry tweaking Windows can become case sensitive as well, though I imagine this would break a lot of things (I also hear it is harder to enable this under Windows 2003).