Our son started dual credit in 10th grade (we had homeschooled before that) and he graduated with his AA this year, he was in 12th grade.
He did not have a high school diploma, but earned high school as well as college credits for the work, and it is noted on his transcript that he earned a high school diploma from homeschool (I did have to submit a transcript and just included all the courses he had taken at the college .... he had 78 hours in the three years and needs 51 to complete his major.)
He's entering the state university in the fall as a junior, and we had no problem at all with his acceptance, even though he doesn't have a traditional high school diploma. Also had no problem getting full tuition scholarship, and the dual credit in our state is free, so it makes for a very low cost way to send your kid to college (we did have to pay for books.)
Here in Dallas, Richland Community College goes one better. It has obtained a charter as a high school. For juniors and seniors it offers a curriculum of college courses for dual credit and, upon completion, confers an HS diploma. If the student applies himself and required no developmental courses (ie, remedial courses to make up for the deficiency of his high school education) he'll get an AA also. Since it's a charter school, it's entirely funded by the school districts, so tuition, books and fees are "free" to the parents. Coursework is college level, so it's intellectually challenging and there's less busy-work and time-wasting than in traditional high school.