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Google officially says its not case sensitive but the general feeling is that it is case sensitive so you are right to be concerned over this. You can change the language segment used in admin mode. Admin Mode > Config > Manage Website Langauges > Edit "Web address prefix".
You can enter the prefix of your choice, setting the case there as EPiServer renders the language segment in the case you enter it in (it actually only allows lower case). So this might be able to help you out.
hi
after upgrading from 5r2sp2 to 6 we noticed a strange behaviour, the link to the page has changed the language string to upper case
so if the link was http://xxx.co.il/he-il/yyyy ---> http://xxx.co.il/he-IL/yyyy
checked another language ar-DZ ( we use ) and also here in 5r2 the link is all lowercase and the 6 is upper case????
the he-il lower case works but all the links are lower first 2 letter and the 2nd upper.
we think that it will cause problems with the SEO of the site so we thought of changing the urlrewriter ( set to lower)