I think that a balance is needed when teaching notation. In effect, notation is a common way of communicating music to each other, so it covers more than just the conventional methods of staff notation.
I admit that I do use rhythmic notation quite early on with my Year 7 pupils as I teach with percussion a great deal. I find that by using simple notation, they can use this as a tool in composition. I also think that it is so useful when developing skills such as time-keeping/pulse/rhythm etc and I constantly test my pupils on their aural perception. I tend to use made-up phrases for rhythms, and I think there is a lot to be said for the "john" (crotchet) "susan" (quavers) "huckleberry" (semiquavers) way.
I also like to explore non-conventional notation such as graphic score or grids, which works really well with some of the lower ability range as well as the more dynamic kids at the top end.
I'm not a great fan of the keyboard in the classroom so I tend not to labour the point too much with staff notation although I do use it a bit with tuned percussion. I find that using the mnemonics which we were all brought up on ("Every Good Boy Deserves Favour" and the like) means nothing to kids who can't perceive the concept of pitch. I'm still looking for a good way to teach notation on the stave as I've tried many ways now. Any good ideas, anyone?
The use of keyboards in the classroom should be a thread in itself.... Thirty kids blasting the "Star Wars : Theme" demo is enough to see me into an early grave