Streaming is when the children are in the same ability groupings for all subjects. So everyone is in say the top set for everything, someone else in middle for everyone. No secondary schools in my local area stream.
Setting is where it is done for each, or many, individual subjects, allowing you to be say top set for English, lower set for maths and perhaps in the middle for languages. Setting works best because it recognises children may have strengths in some areas but not in all.
From what I've seen in a couple of counties, the G&T stuff is more about laying on extra-curricular activities than about what goes in the classroom. So a child might bring a letter home offering them a day's course on creative writing or a weekend course on philosophy or whatever. Or for example last term those deemed to be gifted in history in Year 9 had a day out to a local museum where special workshops were laid on for them.
In my experience, the children don't feel different or labelled, they just think they're good at say maths and that's why they keep being offered different maths activities. And it's really such a small part of school life that most other children don't even notice, it's not done in any obvious or explicit way.
I still think the most important thing is to be catering for the needs of all groups of children. I think the blanket 10% might help in schools where the brighter children are coasting or perhaps left to their own devices because they are reaching minimum standards for league tables etc. If that 10% is helped reach their potential, even if it's not as 'gifted' a 10% as another school might have, then surely that will help lift standards and expectations throughout the school.
Only time will tell...