As with my previous post, I'm interested here in how important grades really are in terms of signaling how successful a student will be in the professional workplace.
How much grades matter depends on the field.
In law school, grades are very important. At least in a student's first year or before he gets his first internship, this is the only proxy that firms have to judge his ability as a potential lawyer. He could present examples of his classwork, but firms aren't much interested in reviewing his performance in mock court or reading essays he's written about legal topics.
In journalism school, at least for those interested in print or online journalism, grades are far less crucial. This is because the firms have a much stronger proxy for determining whether a student will be successful. All journalism programs have some sort of student newspaper or other publication (at least as far as I know), and whatever articles you can produce for the student newspaper are a direct reflection on what kind of articles you can produce at a professional paper. While a professional paper will give reporters access to better sources and (maybe) better technology, it's doubtful that the change of scenery will change the inherent quality of the reporter's work much. It's easy to spot a good writer or a good investigative journalist based on only a few writing samples. Newspapers would be wise to hire based almost exclusively on the quality of prior work, assuming that the student's grades meet some minimum acceptable level.
UPDATE 3/23: I've written more on this subject here.
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