Getting back on topic, I don't think bad GPA + research vs good GPA + no research requires comparison.
Personally, I've never met a person involved in research who isn't already doing well in school. I don't think someone who doesn't have enough to get through his classes, at least by talent or focus and effort, has what it takes to spend time outside the class doing any kind of research, be it experimental "grunt" work or computational "number-crunching" work even if it is true that these require less intellectual ability.
In the case of Stephen Smale, the story is very much incomplete. He did have some bad grades, but those were the exception, not the rule. Moreover, his biography does mention that he started working hard before he reaped the results. My favorite story involvess the Nobel laureate chemist Robert Woodward, who was expelled from his school because he was too absorbed in his own endeavors in the lab after school than his classes per se, but went back, did 16-17 courses in in a semester and eventually made it to grad school.
But one has to take these with a grain of salt - Smalt was born in 1930. In his time, you could attend the first day of college, decide you didn't like it that much, pack up, and drive down to another part of the country and attend another college. It wasn't as difficult to get in undergrad/grad school, because the world population was still recovering from the Great Depression. Today, a little less than 7 out of 100 students who apply to Harvard are accepted - and the number of "valedictorians" in the college market outnumber the total applicant pool you had in those days. Similarly, there weren't 'established standards' to look at for grad school applicants - research, Putnam/IMC, scholarships (Goldwater, Churchill etc.), fellowships whatnot. You could really get in grad school nearly just because you applied, and had a close enough relationships to faculty staff who had connections.
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Anon111: I agree with you that one's grad school might not matter that much. There are people who have graduated from ETH, the grand Ecoles etc. but went on to do a lot. We don't have to look very far - Geim and Novoselov, who won the 2010 Nobel prize in Physics.
negru: Surely. Most of the time we can either test out of classes, or we already have humanities credits from high school. Moreover, if you are in a top school, it's likely that you already have many credits transferred over from high school. But that doesn't happen very often - not enough for there to have enough undergrads-who-had-done-ten-grad-courses to fill whole grad school departments! The people I know who have gone to grad school in Cambridge, Oxford, MIT, Imperial etc. were every bit human: they attended introductory courses in calculus, linear algebra and differential equations like almost everyone else and by no means managed to exempt themselves from humanities (many of them hated these as much). As a matter of fact, the Putnam fellows I know at some of these top grad schools did 4 years in college like everyone else, because they had to stay back and slowly finish off their humanities courses, like everyone else.
In fact even in a school like MIT where students have gone through a lot of high school preparation in university calculus and establish themselves as talented science students, most of the people actually start out with calculus or at most differential equations, introduction to classical mechanics and like everyone else among them, did their load of humanities stipulated in their university requirements.
Top schools are in fact more familiar with the genius kid who wants to get out of his humanities classes, and so have higher standards for people who want to do the same. Like Anonymous217, I would love to know who are these real people (enough to fill a whole department) who have done 10-12 courses in grad school level, not because I don't want to believe it, but because I want to believe it - it really interests me if I can have a credible source about them.
Lastly, to me, it sounds that my argument has sealed enough of a proof that most people who get in these top grad schools don't actually do 10-12 grad school courses in college, because the counterarguments that one can come up with against it require an immense suspense of belief: "you have to work very hard" and "you can become so good that you convince them to let you do whatever you want". This sounds more like Hermione from Harry Potter, or some other book than reality.