Here is a link to information about the policy:
Princeton University - Dean of the College - FAQ
Comparing the class of 2004 to the class of 2007, the University found that the policy has resulted in a 6.5% decrease in “A” grades in undergraduate, non-independent work. The effect on a typical student’s GPA is probably less than one tenth of a point. A few things to note. First, the 35% is a goal not a strict standard, and it is not yet been achieved by all departments. Second, the hard sciences were already grading in accordance with the policy, so their students are really not affected, except when taking courses to meet distribution requirements. The humanities students are most affected by the policy. Third, each department has its own policy for implementation of the goal, and these vary widely. Some departments seem to want most courses to be graded in close adherence to the policy. Others seem to like to have their introductory courses graded strictly so that they can give out more A’s in the courses that majors tend to take. Some Departments, especially the smaller ones, seem to be more or less ignoring the policy. Fourth, junior and senior independent work has a much higher goal, with the expectation that no more than 55% of grades will be A’s.
From what I can gather from my child, the policy, while not welcomed by students, has had little impact on how students interact. The students who are focused on doing the work necessary to get good grades and have the capacity to do so are still mostly getting A’s. On the other hand, the reality is that a lot of students are more interested in their extracurricular activities or the social scene and are satisfied to do enough work to get B’s in many of their courses. Other students may be brilliant in some areas but struggle in other areas and would not be likely to get A’s in some courses under any policy. In fact one could argue that relative to the actual impact of the policy, students may gain more upon graduation from Princeton’s reputation as the most academically rigorous of the elite schools than they lose from getting an occasional B+ instead of A-.