Peter Norton's book called Inside the IBM P.C. is pretty old these
days, but it has a wealth of that kind of information.  You are exactly right
in that the status of the Caps lock key is a bit in a low memory address
that can be set or cleared just like any other memory location.  There is a
ROM BIOS routine for toggling this bit as well as bits for Scroll lock and
Numlock keys.  There is a computer virus that causes randomization of the
case of tHe letTerS BEIng typed by setting and clearing the Caps lock bit.

        When I wrote the speech driver that I use, I read that byte which has
all those lock bits in it and produce a message when one of them changes.
The shift keys do not modify these bits, but produce scan codes that are
just like hitting any other key.  The BIOS sees that you have hit the shift
key so it makes an upper case letter if the mode was lower case or vice
versa.

Martin McCormick WB5AGZ  Stillwater, OK 36.7N97.4W
OSU Center for Computing and Information Services Data Communications Group