Yeah sounds like a team teaching situation to me- the benefits of classes doing this is that for some maths and literacy activities students can be split into appropriate level groups so they are learning the right things for their level. For it to be a successful the teachers have to work very closely together, and from what I understand the students arent always working in such large numbers, sometimes the 2 classes split back into their original groupings, or into small gorupings.

My DD goes to a very large school, and all of their classes are composite classes right from kindy (kindy/ preprimary, pp-1, 1-2 etc right throught the school), and they loop- so when they get older they have the same teachers for 2 years, which I think is a wonderful idea, because getting a new class each year, means a good 5-6 weeks of first term are spent identifying where your class is at, even with records coming from other classes it still take a while to get a handle on where each kids is at for yourself. They are also pretty well known for their team teaching, when I was doing my teacher training they were the pilot school for it, and we did lots of case studies etc on them.

I would say though if you are concerned, go into the school and ask for someone to explain it to you, even ask if you can go and sit in on some lessons to get an understanding of what it is all about. School are usually pretty accomodating like that, parents are partners in their children's educaiton so should feel 100% confident abotu what their children are doing at school.