Some students with good grades will never do well on standardized tests. High school guidance counselors and college admission officers are well aware of this and it is taken into account.
I'm guessing that with the huge emphasis on test scores under "No Child Left Behind", though, that we will see a generation of students who are really, really good test-takers.
I should add that there is increased pressure on principals to "find a disability" (and thereby get testing accommodations) for students who are not good test-takers. Parents should be aware of this and take it into account when making decisions about their child's education.
I went to an excellent public high school and a well-regarded public university. I actually found my college courses to be easy in comparison to my high school courses, and I attribute that to my excellent preparation in high school. However I do know of students who were well prepared in high school, but who struggled in college. As I get older, I've come to think that it's all about finding the "right fit" -- whether it's with a student to a college, a worker to a boss and a job, or a PNM to a particular chapter.