Actually Tennille is refering to the Chem SSP - special studies program. That's the one that just requires the high marks in chem, and you don't have to be a tsp student to be in chem ssp, and vice versa. The main difference in first year is that you get different lab sessions. Staying/ joining in it for second semester just depends on your chem marks I believe.
There is also a maths SSP for those with high marks in maths. There is a selection meeting in first week where you go and fill out forms. This is generally 3 extra topics done during the semester, one hour per week. Again, the selection is independant of TSP selection. Also, those enrolled in the BSc (Adv maths) degree are automatically invited, they just have to show up for the meeting.
For the TSP, you do not apply, you get invited. You'll get in with a uai of 99+ and at least one band 6 in a science or 95+ in ext2 maths. The advantages you get are up to you. To me I found it very useful for waivering prerquisites for higher year units. And yeah, the TSP projects are a nice thing on top of your regular coursework. How much or how little you do with TSP is up to you. You can also discuss with your coordinator, if you are really interested in a certain area, to tailor make a unit of study, just for yourself.
Also, in second semester for physics, TSP students have the opportunity to do a research project on a more interesting topic than the normal lab project that every other student does. I didn't do it though coz I didn't feel like doing so much work haha.
If you are still concerned about the 'really hard to do majorly well in' bit, don't worry. Doing TSP can only help you. There's no obligation to do any TSP activities. You can just be in it and have it on your CV if you want.
Staying in, I'm not quite sure, but I think you need a D average and at least one HD in the relevent subject area.
Oh, and @Xiao: 500 people? Hahaha, you saw how many turned up to see us this year. It was a disappointment. We originally wanted to get the audience to do a Mexican wave but the lack of people was a problem haha. I'd say less than 50 people other than the actual TSP students and the lecturers who marked us.