I currently work 1-1 with students so I am able to have a conversation with each student at the first lesson that includes discussing goals and expectations, prior knowledge, and understanding of the curriculum.
For a full classroom situation, presenting a survey would be a good way to gather this information for a pre-assessment. There are open ended questions, and multiple choice. With this knowledge, I could group students by their knowledge of the subject and their interests.
This Pre-Assessment Diagram shows how I would differentiate strategies and assessments based on the following three groupings:
For tracking student progress, I currently use a curriculum map for each individual student. As students accomplish a task from a learning objective, they get a sticker for that task. Once a student has collected all, or most stickers for his or her level, then I move on to the next level. You can see my curriculum maps on my studio website
For the full classroom, I can still use a curriculum map. It has been modified for General Music Education. Also, plan to group students by their general knowledge and track the group's progress rather than tracking each individual student.