We our finishing up our 2nd year of a K-1 class with DS7. Our K-1 classes our team taught, so some of the time each day is spent with 2 classes combined into 1 large class of 44 kids and some of the day is spent in the smaller class of 22 kids. Our teachers allow each kid to move at thier own speed, so a kindergartener who excels in math will end up working with the 1st graders during math. The learning centers are set up to address 3 different levels, and the kids are assigned a level based on where their are with thier language abilities. In DS's class the teachers will also encourage the older students to help explain things to the younger students who are struggling. This has the benefit of helping to reinforce the material for the older student, and the younger student gets it explained in a new way.
Most of the time in DS's class the kids don't really know who the Kindergartener's or 1st graders are, they just know which level they are in for centers.
I think it does require a lot more from the teachers, they have to come up with new fresh ideas each year, or else the kids will get bored since they have the same kids for 2 years.