Our experience has been the opposite, it didn't work out well - so my input is re the "gotchas". I think that our teachers thought differentiation meant letting the children work at their own pace on individual worksheets for math etc... and that worked out semi-ok (except that they weren't getting truly out-of-level instruction). Where the idea fell apart for my kids was in classroom discussions where the entire class was involved. My EG kiddo was beyond bored with the lack of depth in the discussion in science/history/etc, and my HG+ kiddo complained about how discussions never moved forward until everyone understood the concepts... which was (jmo) doubly a bad situation - not just that she was bored, but she became very frustrated with certain students who were usually the kids who needed a lot of repetition.
My kids also were frequently frustrated with some of the kids they worked on in group projects. I don't actually mind group projects so much in that I think it's good for my kids to have to work occasionally with a child who isn't holding up their fair share of the work due to lack of motivation etc, but I did find it frustrating that they never really had a chance to work in groups of same-ability-level kids, which they would have more opportunities for better fit in a self-contained gifted classroom.
I also think (and this is jmo based on a few classrooms)... that in a mixed-ability classroom, if it follows the typical bell curve, the vast majority of kids are going to of course be somewhere in the middle of abilities, and that was where the teachers' focus gravitated toward no matter how much the teacher truly wanted to differentiate.
I do think it's possible for it to work (and worth trying)... but I agree with DeeDee that without a large investment in professional development, as well as buy-in from the teachers that it's worthwhile, it is not likely to work.
polarbear