I should add that the VWO I mentioned is regarded as the most difficult level of high school. I am convinced that it doesn't take THAT much to make it through one, but you do need to have a certain intelligence and/or ambition. In a way, it's our replacement for those stellar grades, although it's probably not nearly as tough as the requirements you mentioned. This system also ensures that new university students will have a certain amount knowledge before joining the university.
Most people never even bother trying, and go for HAVO or VMBO instead. We have a test at the end of primary school, the results of which will provide you with an advice as to what type of high school you should join. Unfortunately, people tend to regard it as being highly accurate, something I heavily disagree with.
HAVO will allow you access to HBO (called universities of applied sciences/vocational universities in English, but not actually considered universitary by us). VMBO is more or less for the average labourer, and may be followed by the MBO tertiary education
It's possible to switch levels. If you end up overperforming at HAVO, you may he placed on VWO, as it's probably more suited to you. If you underperform, you may end up at a lower level (of course we'll look at personal circumstances and such, we're not that harsh).
On paper, this system seems very organised to me, but I think it's often messy in practice. The step from primary to high school is huge, and the step from one high school year to the next can be pretty tough. I never really learned how to study, which is now biting me in the ass at university. In short, the whole path to your university degree is filled with unnecessary bumps. Apart from that, there are a lot of inefficiencies, such as the so called KWT hours, where you basically have to sign up for a subject that you'll then spend extra time on. You'll always pick the one subject you don't have homework for and don't need extra time on. KWT only exists because you have to spend a certain amount of your time at school, but it's utterly useless if you ask me. I do think that we're on to something, but to actually call our education system good? We're still a long way off from that.