Hmm i'm confused, so we DO have to pass all 12 subjects even though we only have to carry on with 10. ... and if we dont we have to repeat them, this is very scary. Surely thats not true... i hope :S
You have to satisfactorily complete at least 12 units for the Preliminary course. It doesn't matter if you're dropping two units, to satisfy the outcomes of the Preliminary course you must complete 12 units for Year 11. You only have to satisfactorily complete at least 10 for the HSC. Note, however, that "satisfactorily" does not mean "utterly blitz the course". You simply have to meet the outcomes, which isn't too difficult at all.
I_F