I read somewhere about a correlation between schools with grades and higher step 1 scores. Although it is well known that the step scores are mainly dependent on the individual's own efforts and abilities (and have little to do with the school), this correlation is kind of interesting. Maybe some people who would just settle for the bare minimum to pass, actually try harder when there is actual grading, and in return learn "more." However, the P/F grading is really nice for reducing the amount of stress during the preclinical years!
I was also curious, what are your opinions on taking the step 1 half way through the third year (an entire year after being out of the traditional classroom)? Does the context provided by a year of clinical rotations outweigh the amount of information (basic sciences) forgotten during that year?