Godsend, godsend, godsend. Whoever said it's cheating has never tried to play a song-ful of bar chords on a steel-string guitar. I know "proper" D and A chords but they make my hands cramp up after I've been playing them for 4 or 6 hours--C and G are much less stressful for me. Also, I have very short, very crooked fingers that are horribly unsuited for barring (not to mention it just isn't practical to do flying bar-chord changes during a break-neck square-dance tune).
I suppose it depends on your style--some styles have no use for a capo and some are unnecessarily difficult without one. I have a monstrous D-shaped capo that my mother bought in 1972--it looks like something you might close around someone's neck to strangle them--but once I figured out how to use it, I was glad I had it.
Incidentally, they are invaluable on the mountain dulcimer, especially when playing with chromatic instruments so you don't have to retune all the time.