The paper traces the apparently conflicting trends toward elimination of special classes for handicapped students (mainstreaming) and the movement toward special programs for gifted and talented students. Issues related to identification and labeling are examined, and the importance of flexible definitions for both retardation and giftedness is cited. Similarities in espoused rationales for providing services to both groups are discussed, the debate over special vs. regular class placement is reviewed, and assumptions underlying gifted advocates' stress on segregated programing are examined. Controversies over qualifications and characteristics of teachers of both groups are also addressed. The author asserts that the ways in which retardation and giftedness are conceptualized will have a major effect on society's views and educational practices. Common concerns for both populations are voiced, including provision of token services, the need for truly differentiated services and for a continuum of services. Assumptions underlying gifted education must be thoroughly examined, the author emphasizes, before the gifted education movement can be used as a lever to address deficiencies in all areas of education, promote individualization, and value diversity. (CL)