Ok, I'm dragging another British Libertarian site in here.
VindicoVindico, whose blog "Curious Snippets from a Cynical Optimist" is already available on the Libertarian sidebar list, has things to say about "Private Schools and Socialist Logic".
If you don't laugh out loud when Vin chastises a British politician who is making an "elephant in the living room" analogy, well.....I bet you're an elephant also.
My own take on private schools is that they're a good thing as long as they take anyone who can pay for them and they don't discriminate on the basis of race, hair color, etc etc etc. Small l libertarians (as opposed to large L) generally like private schools because they help end the public school monopoly.
Competition strengthens organizations that survive competition. If public schools don't have enough competitors, we'll be stuck with....well, we'd be stuck with what we have now. I had to help a functional illiterate (who has a public school diploma) fill out a job application a few weeks ago. The boy could write his name and phone number, but nothing else.