Just worry about yourself, and try not to pay attention to how other people are doing. The professors here have made it very clear that if everyone made the "A" cutoff, everyone would make an A.
An unranked P/F system is preferable (and there have been talks about extending the P/F period to the first year or even through the entire pre-clinical period), but as SBR mentioned above, many schools use a pseudo-P/F system where they still internally track your overall rank for the purpose of AOA and your director's letter (which seems to defeat the purpose of P/F, but that's just my thought on the matter).
Just to be clear, the first semester at UTSW is UNRANKED P/F. The deans have made it very clear that they don't keep track of your performance for P/F classes beyond P and F.