My son has been accelerated, both whole grade and by subject, because that is typically the easiest way for the school to accommodate the learning needs. Differentiation takes a lot more work on the teacher's part, as opposed to just moving the child into a different class.
There are advantages and disadvantages to both approaches. You should investigate what the school's resources are, what they are most comfortable with, the teachers who would be doing differentiation and/or accepting your child into a higher level grade/class, and what your child's needs are. It really is an individualized decision.
Ultimately, subject acceleration in math wasn't enough for my son. He needed individualized instruction. Also, whole grade acceleration hasn't been enough. We are now waiting for a meeting this month to discuss either subject acceleration in other subjects or differentiation in the 3rd grade classroom. What we come up with will depend on how the teachers and school administration respond.
