Watch the Using a Partial Capo online guitar lesson by Vicki Genfan from Acoustic Rhythm Survival Guide
As I said earlier, the capo I'm using is the Kyser 'Short Cut' capo and is pressing down on the 5th, 4th and 3rd strings, giving you a commonly used tuning, DADGAD, except up one whole step in the key of E. The capo in the example is actually a newer version of the 'short cut' with the added 'lever' which lets you finger the 6th string if you want to just by pushing down the lever. It's cool.
Just hearing all the color tones that you get in a simple I -V progression with this capo gives me tons of melody and song ideas... what about you? TRY THIS: Find more I-V progressions in different keys with the capo on. For example: C/G, D/A, G/D. Try playing these chords like you would in standard tuning and see/hear what happens!
Again, visit my friend Randall Williams for some great partial-capo videos to give you more ideas. http://www.kysermusical.com/shortcut/video.htm