Check out Tamara's blog entry on subject acceleration and be sure to read the comments section.

http://blogs.edweek.org/teachers/unwrapping_the_gifted/2009/09/subject_acceleration.html#comments

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I teach in a school ( K-8 ) where we place students in classes according to what math they are ready to learn. All math classes in the elementary grades meet concurrently, so students can be grouped as needed. Teacher do not know what grade-level book they will be using until after the students have been grouped. If teachers start with a strong group in a 4th-grade text, they may switch to a 5th grade text in the middle of the year.

Currently our honors algebra 1 class has 8th, 7th, 6th, and 5th grade students. We also have 8th grade students who are not yet in algebra.