both my kids are in a multi grade class room, and have been (for ds) since kindergarten. our (small) school splits into 2 classrooms- k-2nd, and 3rd-8th. the kids work at the level appropriate to their 'grade' and receive instruction at that level for most subjects, but for some subjects (history, social studies, science) they are exposed to what the higher grades are being taught as well. the teacher may be discussing a general topic about say 'thanksgiving' and begin the topic with the younger kids (while the older ones are working on something else), as she progresses in the discussion the older grades are brought into the discussion (but the younger ones are free to continue listening in). as a result we've seen both our kids get a much greater understanding of particular topics (way beyond what their 'grade appropriate texts would have them exposed to) and choose for some assignments to do more than is required of them (the teacher will make a blanket assignment of say a 'report on the first thanksgiving'-for the younger grades it may be only one page and have to include a couple of historical facts (actual dates, name a real participant), for the upper grades, much longer-more historical facts, include quotes and foot notes from 2 books they select). the teacher will NOT allow the younger ones to do 'more' unless they can demonstrate that they have the foundation and ability to do so (so no getting praises for 'going the extra mile' and writing a multi page report that is full of misspelled words and bad grammer-until you can do the shorter required version right, you can't do the longer one).
in the k-2nd classroom i saw that it realy benefited my son to be working at grade level, but constantly overhearing the reinforcement of basic skills. this year he's in the upper classroom, and he's constantly coming home and telling us how some math concept he learned will 'someday when i get older' be used as a part of a much more advanced concept (he's seeing that the skills do build on top of each other and will be used down the line).
i'm going to be interested to see what happens next school year-we will be moving out of state and i know i'm unlikely to find a comparable type of schooling situation for my kids, and i know any school we put them into is going to want to test them for an appropriate grade placement. right now the only way we can 'guage' what grade level they are working at is by what grade text they are working in, and how they test out on the IOWA test each year (our school does them at the begining of the year to see where the students 'test out' as compared to schools both in our area and across the u.s.-for the most part all the kids test out as being at the end of the grade they are currently in (and the test is given the first month of the school year) or a couple of years ahead in some subjects (with reading way ahead). it will be interesting and challenging to find an approrpriate placement for them.
i agree blended classrooms are not for all kids-just as all teachers are not suited to teach in them. it realy takes a huge amount of organization to pull it off-and i have tremendous respect for dd/ds's teacher for successfully doing it (we have 2 teachers in the k-2 class, that way they can do group instruction at the same time or one can do group while the other is available for the ones doing desk work).