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By the time I had done with my first round applications, I had no patience left to write or read any more essays. I agree that there will be a huge difference in your first draft and your last but I have to go with Pelihu here.
Apply as early as possible but remember that your essays need to go through lot of revisions. (I mean a lot)
I will repeat this for the thread hopefully named "Advice to 2009ers from the class of 2010", but just to put it here.
Within Round 1, complete the application to the school with the latest deadline FIRST. Then use what you learned on the other applications with earlier deadlines. After you submit the earlier schools, GO BACK to your first application and incorporate what you learned into your essays/application before you submit. This will give you a win-win situation where you get to practice on an application, therefore getting better at it for the later ones, yet not have to "throw away" that first application because of the quality.
For example, Haas' deadline is 11/5, Stanford and UCLA is 10/22-24. I did Haas first, back in early August, completed all the essays and went through 1-2 rounds of reviews with people. Then used what I learned to do UCLA next, and finally Stanford. After submitting UCLA and Stanford, I went back to Haas, realized how crappy it was, and incorporated all the new "methods" I learned from the other two applications. Now I think Haas is at least equal, if not better, than Stanford/UCLA. In a sense, I do NOT have any "first application" issues.
This does require you to start VERY EARLY in the application process though. At least 2 months in advance for 3 schools. Unfortunately I was not able to do Kellogg in R1 because of this method. If I started in July, I would have been able to.