I agree with you about vouchers and free market in education!!!
I also think that schools (or at least classes) should be tailored to meet different learning styles. My daughter with brain damage is a visual learner, but my other daughter is a auditory learner. Some kids (especially boys) also do better in noisy, active, hands-on classes.
I also don't think there should be grades per-se. I'd rather kids be separated by both ability and age. Grant it, I wouldn't want a 7th grader who can't read with my 3rd grader. I think kids who are good at math or reading need to be grouped together and kids who are struggling in those areas should be grouped together.
I remember grouping and think it would be a great idea.