One thing I failed to consider in my previous blog is early admissions.
By admitting many or most of their students early, a college can appear to be very selective when, in fact, it is only selective for people who do not apply early. Applying early decision is the equivalent of ranking a school first, and schools thus know it will improve their matriculation rate by admitting students early. Also, students who really wanted to attend a particular school will perhaps be better than students who may have chosen the school 2nd or 3rd or worse.
A summary of actual acceptance rates at Ivy League schools, early and otherwise, appears here. To understand what is happening here, take Harvard, with the lowest overall acceptance rate of 5.8%. If you apply there through regular admissions, you have a 3.8% chance (less than 1 in 25) of being admitted. However, if you apply early decision, your chances increase to 18.4% (about 1 in 5 or 6). Of course, the quality of the students is likely different between the group that applies for regular admission and the group that applies early, so that the difference between two equally qualified students is likely lower. However, it seems doubtful that the entire difference is in quality of the application pool.
At a recent presentation I heard from an admissions officer at a local college, he stated outright that the standards change between early and later admissions even for "rolling" admissions schools. Put simply, early applicants get priority and are more likely to be accepted.
So what's the strategy? Apply early, but you only have one shot at early decision (typically you can only apply to one school). Therefore, apply to a top choice but the one in which you have a decent chance of getting into, according to that school's average SATs, grades, etc. If you reach too high, you will be rejected and relegated to the regular application pool, where chances of getting into top schools is far lower.