Actually Lazarus VCL to be precise. Compiler should be smart enough to only compile with those classes and functions that are actually used. I'm quite happy with 1Mb executable size with larger graphical projects, and that's before UPX pack.
As for the problem i don't know what key events are used for it. You might have some chance with checking if Shift key is held. Checking for Caps lock needs some crossplatform function which maybe Freepascal has. WinAPI maybe but that's Windows-only.
Edit: By shift i mean, 'A' is code 65 and 'a' is 97. Basically if shift is held, then reduce 32 from ascii value. This will not work with any other characters than A..Z.
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