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In schools that do ability grouping, it's not unheard of to start 1st grade with books like this one:

http://www.scholastic.com/browse/book.jsp?id=2310

I suspect this would be somewhat unusual except in cities with a lot of highly able kids, but I could be off base. DD read books like this one (approx. 4th grade level) in 2nd grade in her GT class. They didn't ability group, though, which I didn't love.