You should know your potential. Take the highest level of classes that you can possibly take without overstretching yourself. One thing that I did last year during my Junior year is that I took AP-level classes in Econ, Bio, Chem, and Physics, but took Honors-level English. This allowed me to keep mostly higher-level courses and still do well in a reading-intensive class. (English is my toughest subject)

Don't take classes that are so hard that your GPA dips beyond recognition. But, at the same time, I wouldn't try to take the easiest classes ever, because colleges will not look too highly on a ridiculously easy schedule. Mix it up!

Although I didn't do amazingly in my rigorous classes, I think I learned more by taking more advanced classes. I think your self-edification is more important than the overall grade. I would rather come into my college interviews with a bright head on my shoulders as opposed to a HS resume that gives off a GPA that doesn't reflect my true potential.

GPA is way more important. Keep your rank up and then you may become valedictorian. Some colleges even offer free rides to valedictorians.