Is de Alfaro under A or D?

First things first

My first name is "Luca", my last name is "de Alfaro". 
If you confuse the two, and write 

Dear Luca de, 

I will immediately conclude that you don't know me, and I might not read on!

I like to sign papers in alphabetical order.  I really do.  Signing in alphabetical order makes collaboration much easier and more pleasant, avoiding difficult issues of how exactly to rank the contributions of different authors.  Hence, the question of how to alphabetize my last name comes up relatively often.

My name should be alphabetized under 'D'

In Italy, my home country, my last name used to be always alphabetized under 'D'. Moreover, I now have some papers with people whose last names fall between 'Alfaro' and 'de' in the alphabetical order, and I chose to be after them in the list of authors; hence, in the interest of consistency, I prefer to be always alphabetized under 'D'. My father, a physicist, also always alphabetizes our last name under 'D' in research papers.

Should I write 'de Alfaro' with capital 'D' or lowercase 'd'?

Ah, now to the fine points. It depends. These are correct ways:
  • You can always write DE ALFARO, Luca. Since the last name is in all caps, also 'DE' is in all caps. Don't write "de ALFARO"!
  • Or you can write Luca de Alfaro. The 'd' is lowercase, when you have the choice.
  • De Alfaro, Luca is also correct: when the 'D' is at the beginning of a sentence, it should be capital, like everything else.
  • You can also write de Alfaro, Luca, when it's not at the beginning of a sentence. But I prefer to use Luca de Alfaro instead.

How do I get bibtex to come up with my name in the correct way?

Simple: just write
author = "de Alfaro, Luca"
This also works:
author = "L. de Alfaro"