It's very hard to quantify, in words, the difficultly of getting into med through Otago HSFY, but here are some numbers that might help:
Number of people in HSFY in 2009 = approx. 1250 at the start of the year, dropping to approx. 1100 at the end of the year.
Number of people accepted into 2nd year med 2010 = 250, 180 from HSFY
Number of people accepted into other professional programmes (mostly, but not all HSFY) = 54 into dent, 120 into pharmacy, 120 into physiotherapy, 60 into medical laboratory science.
A significant number of offers of places in professional programmes are turned down (including a few for med), mainly because you can apply for as many professional programmes as you like, with each application treated individually. In particular, this makes getting into pharmacy, physiotherapy, and med lab sci a lot easier than the numbers suggest. For med though, yeah you'd be looking to score in the top maybe 15% of HSFY. Remember though that the entry standard for HSFY is really low (currently equivalent to ATAR of 74), so a large number of people in HSFY never had a chance of getting into med anyway (to put it bluntly). Also remember that heaps of people who don't get in through HSFY just spend another 2 years finishing their degree and get in through graduate entry.
So, it's definately not easy getting into Otago med from HSFY, but it's not impossibly difficult either and tends to be overstated (by the end of HSFY a large number of people in the current 2nd year med class thought they weren't going to get in).
In terms of the entry standard, it's a sliding scale. There is no interview, so entry is determined solely on HSFY paper marks and UMAT. There is no UMAT threshold, but there is a HSFY threshold - you have to get at least 70% in all 7 core HSFY papers. Lots of people do 8 papers (1 optional paper in addition to the 7 core HSFY papers), in which case only the best 7 are considered, provided the threshold is reached.
Your HSFY average percentage mark is combined with your UMAT raw score (weighted 45/45/10 by the 3 sections) 2:1 (i.e. 67% HSFY, 33% UMAT) to calculate the final ranking score for med.
One consequence of this method is that UMAT is unimportant compared to HSFY paper marks, and people rarely miss out on med from a poor UMAT if their HSFY paper average is a good competitive one. However, a very good UMAT (>95th percentile) does have the power to compensate for a relatively low HSFY paper average.
To put things in perspective, some of the cutoffs for 2nd year med 2010 (not off the waiting list, where the standard dropped a fair bit) were approximately (some variation from rounding and the decreased importance of UMAT section 3):
At least 30th percentile UMAT, and at least 94% HSFY paper average
At least 50th percentile UMAT, and at least 92% HSFY paper average
At least 80th percentile UMAT, and at least 89% HSFY paper average
At least 90th percentile UMAT, and at least 87% HSFY paper average
At least 95th percentile UMAT, and at least 86% HSFY paper average