Capacitors are used quite often in AC, infact every single mains fluroscent light has a capacitor in it.
A basic description of how a computer powersupply works;
For north america, you have 110v, 60hz AC coming in, this goes through a small filter ( essentially a low pass filter,which includes small capacitors across the active and neutral) this is then fed through a diode array which converts it to around 155v DC (the difference in voltage is due to how AC is rated in RMS rather than peak voltage)
This is then filtered by the 2 large high voltage capacitors in question, and then "chopped up" to produce a very high fequency square wave AC.
The square wave signal is fed into a small multi tap transformer, which creates the various voltages, which are converted back to DC again, filtered, regulated, and ready to power the components in a PC.
The reason for all this hassle, (ie, why don't they simply feed mains into a normal transformer) is size, cost and efficiency, the relatively low frequency of 60 hz requires large, expensive and inefficient transformers, the higher the frequency (up to a point) the more efficient and smaller the transformer can be.
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