<p>The raw "smart" component isn't going to be the tipping factor: all realistic applicants are pretty much guaranteed to be smart. Admissions will be looking at what it is that each of you cares passionately about and spends your time doing. Ben Jones of Admissions said on CC recently (post #49 on p.3 of this thread) about students who are happiest at MIT, "They don't look at MIT as the prize; they look at MIT as the logical next step." If that is accurate for you and you are as enthusiastic about MIT as you say and you feel you would fit there, you have the opportunity to make that obvious in your essays, without pandering. Each applicant will be looked at as an individual, you won't be placed next to each other and compared because you attend the same school.</p>
<p>So I think it would only "affect your chances" if your concern about it somehow spilled over into how you wrote your application. I'd encourage you to focus on yourself, and not to be too concerned about someone else in your class who is also applying. Let your application demonstrate why you would be a great fit for MIT, and vice versa.</p>
<p>(PS: 13 students from my son's class of 124 last year were admitted to MIT. MIT doesn't appear to have a quota about how many/few can come from a given school.)</p>