BibTeX loses capitals when creating .bbl file

This is not a bug; it's a feature. Depending on the bibliography style in use, BibTeX converts all characters in the title to lowercase, with the exception of the first character. If you want to override this, wrap the character(s) in curly braces, e.g.,

title = "Pascal, {C}, {Java}: were they all conceived in {ETH}?"

The loss of capitalization is by design: BibTeX does this because some, but not all citation styles require capitalization in titles (a.k.a. "title case"); other styles use ordinary case. Your bibliography database should work with both capitalization styles without modification, so BibTeX styles are designed to work as follows: You must write the title in the capitalized form, and your bst style either keeps it this way or converts it to lower case. Lower-casing works indiscriminately-- BibTeX does not try to guess which words are proper names, acronyms etc. (note that even letters in the middle of words get lower-cased). To protect words that should always be capitalized, you enclose them in braces.

Tl;dnr: Regardless of the capitalization style you want to see in your references, capitalize all content words in titles, and enclose proper names and the like in braces. Like this:

title = "A Short Grammar of {Middle} {English}: Graphemics, Phonemics and Morphemics"

NB: regular words must be capitalized, but not enclosed in braces. This is the only form that will work correctly with either citation style. With styles that use title case, it will appear as written (except for the braces). In citation styles that lowercase titles, it will appear as A short grammar of Middle English: Graphemics, phonemics and morphemics.

Notes:

1. I've added this answer because all the existing answers are incomplete in my opinion: They show how to block BibTeX's lowercasing behavior, but not what it's for or how to use it properly. Even reputable references give bad advice in this respect.

2. Although the BibTeX documentation suggests enclosing only the first letter in braces ({M}iddle {E}nglish), this interferes with proper kerning between letters and should be avoided. E.g., compare the spacing of Fo in {Font} (top: correct) and {F}ont (bottom: wrong).

   

3. Watch out if you need braces in a title for other reasons: They will block lowercasing too, and title = "All About \emph{About}" will come out as All about \emph{About}. BibTeX actually used to deal with this properly: it will lowercase inside braces if they're immediately followed by a macro, as in old-style font commands like {\em About\/}. Unfortunately, this built-in behavior is no help with the modern syntax. You can still benefit from it, though, if you remember to type \emph{\relax About}. (Any command will work in place of \relax, as long as it immediately follows the offending brace.)

4. Even the most careful authors will probably miss some capitals if their usual bst style lowercases everything, or some braces if it doesn't; so if you switch to a new style with different capitalization conventions, inspect your references carefully.

5. There are in fact multiple styles of "title case", as detailed in this article. BibTeX cannot distinguish them: Either it preserves your title case or it doesn't. So choose one title-casing style, and use it in your titles.

If you do want to change all the bibliography entries then you can modify your style file. Copy it to mybst.bst and then edit the file to modify the function format.title to:

FUNCTION {format.title}
{ 
% title empty$
%    { "" }
%    { title "t" change.case$ }
%  if$
title
}

Then it didn't change the uppercase letters. Save the new file into your documents directory and try it. If it works, then you can move it into the local texmf tree.

Various styles can be downloaded from CTAN.