At my school, in year 8 there are two "streams" for maths, seperating the upper half of the year level and the lower half, each comprising about 100 people. Then in year 9, based on year 8 exam results and in-class work, about 20-30 people from the higher stream will get placed into a "top set" stream, where all the material covered is still the same as the other classes, except much more in-depth and at a higher level. In year 10, the "top set" will cover a very little bit of Methods 1/2. Then, most of the top set will be encouraged to do Methods 3/4 in year 11, where the other 75% of Methods 1/2 and Methods 3/4 will be taught simultaneously.
At any stage pre-VCE, it's also possible to be moved around, accomodating for late-developers as well as "smart" people who simply don't work hard enough to stay in a top set.