Our school district would not even consider doing this any more, however when I was a kid this same district did run school this way. There was the 1st/2nd graders, 3rd/4th, and 5th/6th. Two classrooms, 2 teachers and your home room was a combination of the 2 grades of kids, no rhyme or reason for who was in what class.
The day started with the usual announcements and morning warm ups, pledge etc. From there we broke into our groups for reading and math and what not. THere was a sliding door between classrooms. Subjects like art and music and gym were done with your home room group. Subjects like math, and reading were a combo of the 2 grades. One teacher took the slower learning kids from both grades and the other took the faster learners from both grades. The teachers divided among themselves which group they were taking for which subjects. In other words you didn't have the same teacher teaching the faster learners all day and also you didn't always have the same kids in the same groups. Some kids were really bright in reading and English, but stunk and Math and vice versa.
Subjects like spelling and handwriting were done at grade level and didn't matter how proficient you were as it was mainly a lot of busy work any way.
In this way the teacher only taught as fast as the slowest child learned and by keeping us grouped together at speed, no one really got left behind. Nor did kids get bored or frustrated easily. If a child from the faster group fell too far behind or held the class up they were moved to the slower group and the ones who fell too far behind in the slower group were moved to another teacher who taught only 1 or 2 kids at the speed they needed. Usually that didn't last long as once they grasped an idea they were able to quickly catch up. They just got hung up on trying to understand something. Which is true of even adults. If you don't understand something, you can't move forward until you do, but once that light goes on and you get it, you move at full speed ahead.
By the time I hit 7th grade the district changed their policy to only grade level grouping so from there to graduation I was in with only kids in my grade and I began to see problems crop in there. Some classes I was a whiz in and got bored, others, I needed a slower moving group, or at the very least a teacher who was more interested in just the smartest kid in the class and keeping him challenged.
Too many kids today are bored or frustrated with school because teachers either teach too slowly for some to make sure that no one is left behind or else in order to keep the kids from getting bored, teach too fast and lose so many who have problems grasping a new concept.
Nobody learns at the same speed. And I don't believe there is a single stupid person out there that can't learn a subject. But I also don't believe in boring to tears the student who gets the subject or frustrating the kid and making him believe he is a dummy because he can't grasp some concept as fast as his peers.
The only downside I saw to this as a kid was the occassional playground squabbles of "You're a retard because you're in the slow group and I'm in the smart group", but it was usually over inside of a few days and kids were back to playing with each other because parents and teachers both taught alot of empathy and understanding then, (they also stayed out of playground fights unless it was VERY serious) unlike today in which everything is sheer competition. I/My kid is smarter, faster, better looking, makes more money, etc. than you/your parents.
And while I don't think the comment of the younger kids learn from the older is probably real appropriate here in the respect that we are only talking about a year, maybe 2 at the most difference in age, it is also a factor. One room school houses of yesterday and homeschooled families are examples of that very thing. More often than not, the older kids can get ideas and help across so much better than adults can. So many times, adults forget they are dealing with people much younger and have a harder time trying to get their point across in terms a child can understand. Another kid speaks the same childlike language. And most small kids want to be like the older kids, not like the adults.
To this day, I will swear that my 18 year old is just flat out "stupid" compared to my 5 year old. In fact each one of my kids was born smarter so to speak. Why? My 15 yr old learned a few things from the 18 year old, the 12 yr old from both the 15 and 18 yr olds and the 5 yr old from all 3. (And trust me when I say everything learned has not been good or in MY best interest!)
I would love it if our school district would return to such days of teaching. Unfortunately, our district says studies show that kids do better if placed with their same age. They claim the pressures of learning are lessened if 10 yr olds learn with only 10 year olds. And this is the reason they will not hold a student back a grade and will try and talk parents out of it if they try. The end result, kids graduate from school stupid, but at least they do so with their age group!