I went to Grad Nite last year with 3 other friends. We had a great time. Disney had no problems with a small group like ours, they said the smallest group they have ever had was only two people. I HIGHLY recommend the event, over just a regular Disney trip. Disney is always wonderful, but it is nice to have a special event just for seniors.
On the night we went, it was not crowded at all. Big Thunder and Splash were only about 10-15 minute waits, Space started at about 10, but brokedown, so it increased to about 40. Space is unique for the event, as they add speakers throughout the ride building and blast top 40 music. Our group had a "once in a lifetime" ride on Space, with the lights on (it brokedown right after we just started the ride. They got it working again, and let us finish with the lights on, and then go to the front of the line and ride it with the lights off. AMAZING!)
They do have special photo opportunities with the characters in graduation gowns and caps. The fantasyland rides were all walkons. It was amazing-we went to Philharmagic and there was not a single other group in line for over five minutes while we waited in the foyer. There were only about 40 people in the whole theater. Very cool. We never really encountered any rude guests while we were there.
You do have the option of going to a Blastoff party prior to the actual event. Two blastoff party options:
-AK:
Ride EE, Dinosaur, and Primeval Whirl. Food and drinks available.
-MK:
Ride all MK rides. Food and drinks available.
Both of the blastoff parties are priced the same (~$20) and last for 3 hours. I recommend the MK blastoff party, as then you do not have to transfer to MK and go through two entry and security lines. You can also ride more rides. When we first entered the MK blastoff party, we were the first guests in the park. Frontierland and Liberty Square were COMPLETELY empty (even though it was only for a few minutes).
The main Grad Nite event lasts from 10PM to 4AM. At about 3AM, most guests start to leave and the park gets really empty.
You do get discounted tickets through Disney. Tickets are around $140 for a 3 day park hopper, for example. Tickets have already been on sale since late 2006. There is a chance some nights may already be sold out.
The trip does not have to be completely "school sponsored," as my school refused to sponsor it, but said they did not mind if we went [with a parent chaperone, of course]. Disney offers room discounts if you book 10 or more rooms. Transportation is available from your resort for a small fee.
If you have any other questions about the event, reply.