Abbreviated version:
Two of my children are in the same high school level biology class. They are covering a complicated topic right now and the teacher has been documenting on the board which students are "Clueless" on the board. They are in the same class period together but are in different grades - my son is younger. OH - and the list gets erased at the end of the class period and a new one started each period.

ie: DD's friend was called on to answer a question (she did not volunteer but was chosen). She answered incorrectly (because she doesn't understand the concept) and the teacher put her name on the board under the heading "Clueless". This was in a class period that my children are not in. (Friend shared with DD because she was really upset about this!)
In *my* children's class period, there was a similar discussion of some students being clueless and some knowing what was going on because this is a hard concept. He then stated, "I'm going to show you the difference between someone who knows exactly what's going on and someone who is clueless." He then proceeded to call on my DS and ask him a question, which he answered correctly, then called on DS's friend to answer another question which he missed, thus deeming him the "clueless" one. DS was upset by this for obvious reasons.
I just don't even know who to call first - teacher, principal, guidance counselor - or all three? I just thought this was horrid. According to the children, the point of this is supposed to be to identify the kids who have the conept well in hand so that they can help those that do not, but this just seems like a degrading and humiliating process.

My DS was one of the kids who "gets it" and he was horrified to be singled out in that manner, I can only imagine how the other kids feel that are having difficulty.
The general consensus among the students was that this was really mean.
Thoughts? Help?
Oh - my question is - I can't even begin to formulate a polite, e-hell approved response. Most of my thoughts have centered around asking the teacher if HE is on the clueless list!
ETA: forgot to add my etiquette question!