Thanks Hans.
I've updated the wiki. I'm wondering if there's a way to also control the indenting? Max's solution removed any indenting, allowing the text for the second paragraph to be flush. It looks a little strange to see text indented next to a drop-cap. The test case is the same, but with the addition of an indenting setup:
% SOT
\setupinitial[n=2, continue=yes]
\setupindenting[medium, yes]
\setuphead[chapter][
after={\placeinitial},
page=no,
]
\starttext
\chapter{one}
Kermit Ruffins
Meet me at the second line.
\chapter{two}
\input knuth
Meet me at the second line.
\stoptext
% EOT
This produces an unintended side-effect, as well, whereby the following chapter heading is indented.
Cheers!
