But as it is presented in the context of an ATX supply, it seems to be overkill and that is what was confounding me. I haven't seen a PC with an ATX supply where simply grounding the "power on" (green) line on the supply has created an issue.
Interestingly, I once argued your point in a thread Randy, but I changed my mind once I saw how broadly useful the trick could be.
You're right that the ATX usefulness of the cap trick is limited. The cap trick is very useful for PCs (eg with AT power supplies) that, for some reason, can't be set to auto power on when power is applied. However, vaguely modern PCs runing WinXP on an ATX machine can do auto power-up anyway so it is irrelevant.
Now, so that noone gets the wrong idea, I'd better tell you that you can't use the ATX pin 14 (the green PSON wire) as a momentary power-on switch. This is purely an on/off. Short this pin to GND to switch power supply ON, and while it is shorted the PC is on. However, disconnect from GND and the PC will IMMEDIATELY switch OFF. The cap trick will NOT WORK with pin 14.
A PC's Momentary on/off is actually controlled by the motherboard, which is why you need to use the cap trick on the power on/off switch on the mobo (look for the front panel header), not from ATX green pin 14. I believe that this is the way that Peale has described the cap trick on his site.