Well whatever commands that I have seen with sed related to changing a string or a letter in a file it require both source and destination file. Have a look at this link: http://www.grymoire.com/Unix/Sed.html#toc-uh-17
and you will understand how sed works and you will also find the way that I gave for changing a lower case letter to a uppercase.
In the example you gave me if you want lowercase i to be changed as uppercase I then you can go with the following command:
sed 's/i/I/g' source_filename > destination_filename
If you want to have the changes back in the original file then you can run the above command as below:
sed 's/i/I/g' source_filename > destination_filename && cat destination_filename > source_filename
Make a backup of source file so that you do not loose whatever you saved if something goes wrong.