Many many schools have strict GPA and/or MCAT requirements (and no, I'm not talking about the 2.5 that some schools list in the MSAR). One of my personal advisors for the past several years is also an adcom director at one of the local medical schools, so I am not speaking out of turn here.
Her school has strict 3.0 cum and science GPA cutoffs. Even though she and I have a great relationship, and she's made many phone calls in support of my candicacy, I didn't meet the schools criteria. Her words verbatim to me on more than one occasion were "XXX has a strict GPA cutoff. You know if I could bend the rules, I would do it for you."
That being said, you should definitely have some reach schools (but not too many... that's just unrealistic). Two or three tops. IMHO, you're just wasting your time and money after that. I work at one of the top medical schools in the nation with 5 LORs from very well known attendings here... Didn't bother applying.
Point of the story: Actually call and speak with the admissions office if you're not sure whether you're competitive or not. The MSAR is a great guide, but nothing beats getting news from the horse's mouth.
RE: IS vs OOS applications - Again, be smart about it. If you're not from GA, don't apply to GA public schools (or LSU, MS, etc etc). As stated previously, look at the MSAR. Some schools state flat out that they don't take OOS applicants. That being said, if you're from a state like the aforementioned (and also TX!), you HAD BETTER apply to your state schools. Unfortunately, I come from a state where no real preference is shown to its residents. All of my interviews and acceptances (sans 1) were OOS. It's all about playing your odds and remember to KISS.