I'm not sure how feasible that is... It may be a bit off, but my back-of-the-envelope equation gave me something like 1 square meter of capacitance plate area to drive something like an LED with 5v at 100KHz. based on the values I chose it could probably be quite a bit smaller but would still almost certainly be extremely large... with inductors it could be done in a very small space quite easily, especially if he uses some ferrite cores to help concentrate the field.
perhaps I am misunderstanding you ljcox... are you talking about just detecting the presence of the sliding part? it sounds like he wanted to transfer power TO the part to light an LED that was mounted on it... if he just wanted to detect the sliding part, using an opto-interruptor or even a magnet and a reed switch would be quite a bit simpler than capacitive coupling...