Yes, you can still use the capo to set the relief, but you may want the neck straighter than you would set a fretted bass. Yes, I would start with the 12th fret height, but go to the board--that would be a good starting place, and adjust from there.
One thing I could never find in a book or on-line is that you may need to cut the nut slots deeper. Some manufacturer use the same stock nut on a fretless bass as on a fretted one, and the slots will be too high by the height of the missing frets. You can take the slots down to where they are just a few thousandths of an inch off the board.