Ontherocks wrote me and asked for my opinion on 25-man raids versus 10-man raids. He has a small guild, and he likes 10-man raids much more than the level 60 entry-level 40-man raids. I haven't done much 25-man raiding yet, but recently I was at Gruul and SSC with my guild. We killed Maulgar, who dropped the T4 shoulders for me, and Gruul. Funnily we wiped once on Maulgar, due to an unexpected pull, and didn't wipe at all at Gruul, although Gruul is supposedly much harder. We then went to SSC and wiped repeatedly on Hydross. I have problems comparing 10-man and 25-man raids in TBC, because the 25-man raids are harder. Going to SSC was certainly less relaxed than going to Karazhan, but that might well be because we have Karazhan "on farm" and are still struggling with SSC.
Some commenters were recently argueing whether raiding required skill or was just a gear check. I don't think the answer is simple, it depends very much on the specific encounter. Killing Hydross definitely requires a lot of coordination, thus is more of a skill check. Hydross has two different modes, water and poison, and due to a debuff you can only tank him in one mode for a limited time, and then need to drag him over a line to change his mode. Whenever he crosses the line he spawns 4 elementals and loses all aggro. Thus if somebody still damages him from his old side of the line, he goes right back to where he was, spawning another 4 elementals. So if the damage dealers, and especially dotters, don't watch very, very, very carefully what they are doing, Hydross crosses the line several times and deluges the raid with a large amount of elemental spawns, and it is game over.
Gruul on the other hand isn't all that complicated to kill. It is much more of a gear check. Gruul grows and grows, but if the raid group does enough dps, they'll kill him before he grows unmanageable. As our excursion showed, if your raid group is really well equipped, the Maulgar encounter can become more difficult than the Gruul encounter. But normally you can beat Maulgar with a bit of practice and not so much gear, while all the skill in the world isn't helping you much with Gruul if you aren't well equipped enough.
In general both skill and gear help most of the time. And in many cases you can to some extend replace one with the other. I remember doing a retro raid to Molten Core at level 70, and gear made some encounters very easy, which previously required a lot of skill. For example being turned into a bomb at Baron Geddon used to require you running to a safe spot, because otherwise the explosion would kill you and your neighbors at level 60. At level 70 we had a couple of people not knowing where to run, but due to much higher health they just shrugged off the explosion and nobobdy got killed by it.
It isn't necessarily the total number of people in the raid what counts. For skill checks it is more important whether the encounter is designed in a way that all of them need to do it right, or whether only X people need to do it right and the others don't have to play perfectly. If everyone needs to play perfectly, a higher number of raiders makes encounters *more* difficult. Imagine everyone has to do something relatively easy, for which he would have a 90% success chance. Take 10 raiders in an encounter where only one has to make a mistake for the raid to wipe, and the chance of success drops to 0.9^10 or 35%. If you need everyone in a 25-man raid to not make a mistake, the success chance is down to 0.9^25 or 7%.
Depending on how the encounter is designed, and what everybodies gear is, it might not be necessary that everyone in the raid is on the top of his game. The old 40-man raids certainly had some room for slackers. Then raids get easier, especially if for some roles (like dps) you can replace one guy with top gear by two guys with lesser gear. If you've been in WoW long enough, you might remember that it used to be possible to raid Scholomance and Stratholme with 10 people, UBRS with 15 people. Patch 1.10 changed those caps to 5 and 10. And although the mobs were made slightly easier, going to UBRS with 10 raiders was more difficult than with 15. The 5 extra people before weren't strictly necessary, but helpful.
When I first entered Karazhan in March last year with my previous guild's B team, we were all so badly geared that everyone of us would have had to play perfectly to succeed. And as we all had very little or no practice either, we only managed to kill Attumen, and just wiped over and over again on Moroes. When I went to Karazhan with my current guild (which is actually the guild I started the game with), I went with people with much better gear, and much more practice. And suddenly Moroes was easy. I was still wearing the same gear, and probably played with similar skill in the two raids. But probably my raid skills aren't perfect (I'm too slow for split second button mashing) and it is well possible that in the first raid I contributed to us failing, while in the second raid the degree of perfection needed from me was lower and I passed the skill check.
So instead of thinking in terms of gear check and skill check, I'd say that every raid encounter is a skill check, but the degree of difficulty of that skill check varies with the specific encounter, and can be modified by everybodies gear and the skill of the other players in the raid.