A common style of typesetting, now seldom seen except in newspapers, is to start a paragraph (in books, usually the first of a chapter) with its first letter set large enough to span several lines.
This style is known as "dropped capitals", or (in French) «lettrines», and TeX's primitive facilities for hanging indentation make its (simple) implementation pretty straightforward.
The dropping package does the job simply, but has a curious
attitude to the calculation of the size of the font to be used for the
big letters. Examples appear in the package documentation, so before
you process the .dtx, the package itself must already be installed.
Unfortunately, dropping has an intimate relation to the set
of device drivers available in an early version of the LaTeX
graphics package, and it cannot be trusted to work with recent
offerings like PDFTeX, VTeX or DVIpdfm.
On such occasions, the more recent lettrine package is more likely to succeed. It has a well-constructed array of options, and the examples (a pretty impressive set) come as a separate file in the distribution (also available in PostScript, so that they can be viewed without installing the package itself).
This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=dropping