Drop Capitals are frequently used in many newspapers, books and magazines in the offline world.  You will frequently see the large capital letter sinking down into the first paragraph of articles, stories and chapters in the majority of publications you come across.
The drop capital gives the page a nice finishing touch, and certainly adds a more professional looking feel.

Online, the drop capital looks just as good on web pages as it does in print. The only drawback is that you can easily get the whole effect wrong, and end up with a less than appealing result.

When most people attempt to create a drop capital effect on a web page, they usually just enlarge the first letter by a few font sizes and make it bold.
If you do this on your own web page, you will notice that instead of a 'drop' capital effect, you end up with an odd looking letter which sticks up above the rest of the paragraph, and just looks out of place.

There are essentially, two parts to creating the drop capital effect.

You need to create a drop capital image using some graphic software.
You can use any standard piece of graphic software like Paint Shop Pro, Fireworks, or Photoshop.
The drop capital image should ideally be big enough to drop down between 2-4 lines of text, depending on your preference.
You should ensure that the top of your drop capital image is level with the top of the text next to it. The bottom of the image should also be level with the bottom of the lowest text next to it.
This is really the hardest part of creating a drop capital effect.  It can be very easy to make the image just a bit too big, or a bit too small. You may find that it will take a bit of trial and error to make it look just right. However, the extra effort will pay off, as the end result will be worth waiting for.
One thing to note: As with any image, a drop capital image can slow a web page if the file size is too big.  To help reduce the file size you should save it as a '.gif' image.  For even better results you should try to optimize the '.gif' image as well by reducing the amount of colors being used.

This step is the easiest bit?
Once you have created the drop capital image, all you have to do now is to insert it into your web page.  You just add the image to the web page in the same way that you would with any other image on your page.
When you place it at the beginning of the paragraph, make sure you remember to delete the first letter of the normal text.  Otherwise you will end up starting the paragraph with two of the same letter.
Align the image to the left
Initially, you will notice that the drop capital image just sits on top of the first line, instead of dropping down into it.  Not for long!

All you have to do now, is align the image to the left, and you will see it drop down instantly into the paragraph.
If you are using a web page editor to create your web pages like Microsoft FrontPage or Macromedias Dreamweaver, aligning the image to the left is pretty easy.

Select the drop capital image by left clicking it once. Then click on the align to the left short cut icon in the top menu bar.  Alternatively, you can select Format, then Position from the top menu. In the pop up window, select Align Left under Wrapping Style.

Select the drop capital image by left clicking it once. Then in the properties window, click on the arrow in the drop down menu next to Align, then select Left
If you are using a different web page editor, you should have a similar align option in the menu area.  Alternatively, you edit the HTML code directly yourself.  Just add the following command in between the brackets of the image tag:
align="left"
Thats literally all there is to it!

If you have multiple pages on your website, youll probably going to need to create a number of different drop capital images for each letter of the alphabet.  The extra effort will be worthwhile as you will end up with a much more professional looking website.