When I was an undergrad, I realized too late that Grades Do Matter. To the school, to employers, to your parents, to grad school. My distractions were depression and working at the school paper. If the Internet had been around in the early 80's, I would have been in major but major trouble.
I finished my bachelors with barely a B average. Thanks to my department's liberal we-want-you admission attitude, I got into grad school with it.
In library school, I was more focused, and my depression was mostly under control. Most of the time, I worked my butt off. I have a 3.46 average now.