The increasing diversity of students in today's schools has led to much categorization and labeling and to a set of fragmented categorical programs. While in principle an inclusive school system should provide for the diverse needs of all students, in practice a disjointed and separatist system for special students continues to be the norm. Concerns about student placement in special education programs were reflected in the standard proposed by the National Academy of Sciences (NAS), which found little value in the programs and classification schemes it reviewed in 1980. The NAS proposed an Aptitude Treatment Interaction standard based on instruction for classification that stated that there must be evidence that some students have characteristics that make one program desirable for them while others benefit more from different approaches. Research has indicated that present methods of classification are inadequate, and that the two-step process of determination of entitlement and analysis of educational needs is basically flawed. For moderate learning improvements among students with special needs, it is best to avoid special placements. For extraordinary improvements for all children, educationally effective practices that focus directly on classrooms and homes should be employed. (Contains 1 figure, 2 tables, and 30 references.) (SLD)