Cluster virtualization is a promising approach to construct customized execution environments for Grid users. However, Virtual-Machine Cluster (VCluster) comes with the cost of the overhead caused by virtual machines, which therefore degrades system performance. In this paper, we propose a novel hybrid cluster model, namely TopCluster. By exploiting a Hybrid Batch System (HyBS) mechanism, TopCluster can flexibly allocate both physical or virtualized resources via a unified front-end. To reduce the overhead caused by the dynamic deployment of virtual machines and applications, we also propose a valuebased deployment strategy along with TopCluster. An XML-based Application Deployment Description Language (ADDL) is also newly proposed to describe properties, installation procedure, and configuration operations of applications. A prototype system has been implemented and a series of experiments was conducted to evaluate TopCluster by replaying a real world trace. Results show that TopCluster can averagely generate 24.6% and 46.8% higher system throughput, 26.3% and 110.6% higher resource utility, and 35.1% and 56.1% lower waiting time of jobs than two commonly applied cluster models in Grid: Traditional Physical Cluster (PCluster) and VCluster.