I can't seem to get indenting to work. I've tried various combinations 
of \setupindenting, \indenting and \indent to no avail. My latest try 
looks like this:

\setuppapersize[letter][letter]

\setuplayout
   [  backspace=0.10\paperwidth,
          width=0.60\paperwidth,
    rightmargin=0.20\paperwidth,
         footer=0pt,
       topspace=0.10\paperheight,
         height=0.80\paperheight]

\setuppagenumbering[alternative=doublesided]

\setupbackgrounds[text][rightmargin][frame=on,rulethickness=0.05pt]

\setuplabeltext[en][chapter=Chapter ]

\define[2]\ChapterCommand
   {\inright[][align=middle]{#1}%
    \midaligned{#2}}

\setuphead
   [chapter]
   [command=\ChapterCommand,
    after=\hairline\blank,
    header=empty,
    textstyle=\cgd,
    numberstyle=\sca]

\definefontfeature[smallcaps][smallcaps][onum=yes]

\definetypeface[mainface][rm][serif]      [pagella] [default]
\definetypeface[mainface][ss][sans]       [modern]  [default]
\definetypeface[mainface][cg][calligraphy][chorus]  [default]
\definetypeface[mainface][mm][math]       [palatino][default]

\setupbodyfont[mainface]

\setupindenting[next]


\starttext %\showframe

\indenting[small]
\startchapter[title=Knuth]
\input /usr/home/wwm/LoremIpsum.tex
%\dorecurse{10}{\input knuth\par}
\stopchapter

\startchapter[title=Zapf]
\dorecurse{10}{\input zapf\par}
\stopchapter

\stoptext

(Yes, this is an expanded version of Wolfgang's example from yesterday.)

This is LuaTeX, Version beta-0.70.2-2012052318 (TeX Live 2012)
ConTeXt  ver: 2012.05.29 00:12 MKIV  fmt: 2012.6.7  int: english/english
i386-FreeBSD 9.0
-- 
Bill Meahan K8QN

"The pessimist complains about the wind;
  the optimist expects it to change;
  the realist adjusts the sails."

-- William Arthur Ward

This message is digitally signed with an X.509 certificate
to prove it is from me and has not been altered since it was sent.