GAIA spectroscopic and radial velocity performances are reviewed on the base of ground-based test observations and simulations. The prospects for accurate analysis of stellar atmospheres (temperature, gravity, chemical abundances, rotation, peculiarities) and precise radial velocities (single stars, binaries, pulsating stars) are colourful provided the spectral dispersion is high enough. A higher dispersions also favors a given precision of radial velocities to be reached at fainter magnitudes: for example, with current parameters for GAIA spectrograph, a 1 km s-1 accuracy on individual epoch RVs of a K0 star is reached at V~13.0 mag with 0.25 Å/pix dispersion spectra, at V~10.3 mag for 0.5 Å/pix, and V~6.7 mag for 1 Å/pix. GAIA radial velocities for single stars can match the ~0.5km s-1 mean accuracy of tangential motions at V=15 mag, provided the observations are performed at a dispersion not less than 0.5 Å/pix.