For anybody applying with a drastically low GPA, I can probably sympathize. Mine's is a long story of failure -> redemption and I'd like to share it with anyone who's interested in hearing about it. Here are my answers to the questions:
1) 2.6 GPA at top 25 public school (was on academic probation during senior year, no less). Basically completely lost my focus in school and went down the wrong path, hitting rock bottom. Had a dramatic revelation followed by personal transformation shortly afterward, part of which included attaining a top MBA as a long-term goal.
2) 7 years later, applied in FY 2008 (shot too high and dinged at all schools applied). For FY 2009- dings at Duke, Darden, Cornell, Kellogg.
3) I was R1 W/L at one of Yale-Tuck- Ross (won't say which, but really wanted to go there). After sending in pertinent waitlist update, I was accepted at start of R2 Matriculating for Fall of 2009.
Net results: Applied to 11 schools over 2 year span, dinged at 10, waitlisted at one, and accepted shortly thereafter.
Ultimately, I was able to make up for my low GPA but it was still an uphill battle because of it. Based on my own experiences, I do believe that all things are possible with the right frame of mind and some divine assistance as well.
PM me if you want more information on how I overcame the GPA issue.