I believe there are 2 kinds of competitiveness that are often confused. The first kind is where a person competes with others for some kind of limited resources and is therefore interested in the others failing; the second kind is where a person wants to do his or her own best, regardless of where he or she stands in relation to others, and is not interested in other people failing.
Curved grading encourages the first kind, and I abhor it. Though, as far as I understand, none of the schools I interviewed at has curved grading; I believe it's becoming a thing of the past.
P/F grading is supposed to encourage cooperativeness, and I believe it does in many cases. However, many of P/F schools rank students internally and report their rankings (quartiles) to residency programs, so even if the school is P/F, it still matters how well you do relative to others. On the other hand, P/F grading without ranking seems kind of unfair to people who push themselves hard to do their best, because they get exactly the same grade as those who studied just enough to pass. In this sense, F/P/HP/H grading may not be so bad after all if - and this is important! - there is no curve and anyone who gets enough points gets the grade.
Of course, what matters in the end in terms of residency applications is step 1 score - which, according to an AECOM study that was posted in the MCAT vs. USMLE thread, best correlates with preclinical grades (i.e. if there are grades; in other words, it best correlates with how hard you studied in your first 2 years - surprise, surprise!).
Most importantly, what *really* matters is what your individual goals are. If you're not aiming for a competitive residency and/or you have to juggle family and school, P/F without ranking is probably your best bet for a culture you want to spend your next 4 years in. If your goal is a very competitive residency, you must be a competitive person (of either kind), and in this case grading doesn't really matter because you will push yourself as hard as you can regardless of the grading scale; chances are, you will go to a school with a competitive culture in the first place, hopefully it's the right kind of competitiveness.
I agree that each school touts the cooperativeness of its students, whether it's true or not 😛 Even with P/F grading, cultures of different schools may be very different.
For example, I got very different impressions from two P/F PBL-heavy schools. One of them (Pitt) strongly emphasized its supportive cooperative culture and student ECs (and I actually bought that! 🙂), but some of the students complained that their first year PBL sessions were of very varying quality because, due to the P/F grading, many students just did as little as necessary to pass and gave crappy PBL presentations. (Which does not deter me, Pitt is one of my top choices.) That said, I cannot imagine that Pitt students are not competitive at all, given their USMLE scores and match lists, not to mention what kind of students are selected to the school in the first place.
Case (😉) number two: CCLCM. It famously advertises its P/F grading system as something that takes some pressure off students. But the thing is, it's not the impression I got from visiting the school and some other information I've read here on SDN. In fact, the evaluations and portfolio system looks like something that will put even more pressure than grades, in my opinion. I look at it this way: a grade is a grade; I get 81% on a test and get a B, and this is between my professor and me, unless I share this information with other students or someone uses detective skills to uncover it (which is creepy - and highly unlikely). But with the evaluations and portfolio system, you're *always* under pressure to distinguish yourself from the other students and to be liked for your presentations, your research etc. Moreover, instead of your grades which are collected automatically, you have to record the instances someone (professors, fellow students) complimented you on your performance, your attitude etc. To *me*, having to *always* perform at a high level and *always* be evaluated by *everyone* seems like a tremendous amount of pressure - and I'm actually a competitive person (of the second kind!). Basically, the snippets of vc7777's portfolio that he posted in the Case thread scared the **** out of me, and I'm very grateful he posted that. And I'm really not a slacker, I'm actually quite a workaholic. But I really doubt the school's atmosphere is as noncompetitive as the school presents it. It's a great program in many respects, but I don't think it's the right culture *for me*. But I bet they have awesome PBL presentations because nobody ever gets to slack off under the watchful eyes of fellow students 🙂 And it's a P/F school as well.
Bottom line: *for my purpose*, grading scale is one of the last things I will consider when selecting a school (if I have a choice at all 😀), right next to the quality of the school's gym - I know I will have to study my ass off no matter where I go; what matters for me is the clinical/research/global health opportunities the school offers and, to be honest, the totally subjective feeling I got from the school when I visited it.