I don't use a capo.  I can't figure out where to put it on my keyboard...
 
as a leader, I've worked with a lot of guitarists live.  some of them use a capo on every song that's not guitar basic chords (A, G, C...?). 
 
others don't ever use a capo.
 
it's really a preference of the guitarist and I don't look at it as a cheat or crutch at all.  it's just another tool.
 
one thing this is a problem is tuning.  it's not always easy to get the guitar in correct tune with a capo.  those who use capos in our band tend to be out of tune more often than those who do not.  especially if they move the capo between songs, they tend to not have every string exactly straight with the capo, causing some of them to be slightly out of tune with respect to the others.

A capo will tend to make a guitar's tuning sharp compared to having open strings but, really, how many guitars are actually in correct tune?  This is why there are so many "systems" out there that try and make the subtle adjustments required to make even EADGBE sound right.

but, really, how many guitars are actually in correct tune?

 
....none.

I can't recall ever hearing capo's being associated with cheating. Personally I just like the sound created when a guitar is capo'd. Ian Anderson (Jethro Tull) first caught my attention to that sound. Of course there are the practical uses as you indicated, Rain, such as key transposing. Even then, I just never thought of it as a cheat. If it makes a song playable, then go for it.

And you can get capo frenzy...

http://www.youtube.com/watch?v=2r9CbVaXrnA

My son believes capos are for lazy people who don't want to transpose.
 
I'm too lazy to agree or disagree.

A capo is a good tool.  Here's a good article on them:
 
http://www.guitarworld.com/top-10-guitar-songs-played-capo
 
 

Capos also are a great songwriting tool.  Sometimes changing the key and tonality can take your voice and the melody places where standard tuning or bar chords do not.
 
Alternate tuning and capos are indispensable song writing tools for guitar players.
 
My capo has a built in tuner, I am double cheating !!

Rain
But these all have to be recorded in a single take - no comping. I'd rather re-record the same passage 200 hundred times - seriously.
 

I do that, too. It's a curse.
 
As for the capo, I lean toward the "it's a tool" school of thought. I haven't used one for years, but it might be worth another look.
 

kennywtelejazz
Yeah , lets talk about capos ..
 
here's a little something I did while using a capo in standard tuning 
 

 

 
Great stuff, reminds me a little of Duck Baker or Davey Graham. 
 
I absolutely love using a capo on a steel string. Everything becomes much less effort to play and to me it just sounds like a more balanced sound. I do a lot of "boom-chucka" banjo style picking on guitar and it sounds amazing with the capo high up, say on the 5th fret or higher. I also like to detune my B string to an A, you get that 5th interval going on the top two strings which is a great drone. 
 

Willy Porter, using a full and a partial capo together;