Our elementary school runs Preschool through 6th grade; middle school is 7th and 8th grade. There is a big graduation ceremony at the school - "diplomas" given, slide show of pictures through the years, each child tells a special memory while they were at the school, etc. They also go on a big (long) special field trip the day before (Boston - Aquarium, Duck Tour, Quincy Market, USS Constitution, RainForest Cafe, etc). It's a big deal.
We took our family out for a nice lunch after the graduation. One girl had a pool party and invited the whole class - no gifts given. My son also wanted to have a party, but we waited until the end of the summer and had a "going off to middle school" party. The kids in his class were going to at least 5 different schools, so they enjoyed being together one last time.