Distributing children of age 10 into groups based on their predicted future academic achievement works about as well as you would expect (i.e. not very well), but the redeeming feature of the system is that it is reasonably fluid and you can change tracks. You could, for example, do Abitur after completing Realschule and then move on to university. It is also possible to change directly from Realschule to Gymnasium at basically any point, if you meet certain standards. (You can also take university classes while in Gymnasium without too much trouble.)

There is also the Gesamtschule, which combines the three tracks (Hauptschule, Realschule, Gymnasium) into a single school.