In SMW 1.0 page names are not compared case sensitively withing queries.
When Page1 defines [[Some page property::CAPITALIZED]] and Page2 defines [[Some page property::DeCaPiTaLiZeD]] when "Property:Some page property" has type Type:Page, following query:
<ask>[[Some page property::Capitalized]]</ask>
returns both Page1 and Page2 as a result.
While it might be fine to compare strings case insensitively, comparing page names must follow MediaWiki configuration described at http://meta.wikimedia.org/wiki/Help:Page_name#Case-sensitivity, which means that (according to *current* functionality) it must work case sensitively (including first letter if $wgCapitalLinks is set to false).