Some plans limit school choice to within the state. Fidelity has a prepaid plan that can be used in any state. There are no limits on total contributions. Upon withdrawal, the money is taxed at the child's rate. The money also legally belongs to the child when he or she reaches adulthood, which is one of the drawbacks.
Distributions are free of Federal income tax.
Also, if you're planning to rely on financial aid to fund college expenses, keep this in mind. The assets of both child and parents are used in a needs-based financial aid analysis approved by Congress. Retirement plans, such as traditional and Roth IRAs, are not currently considered assets so make sure to fully fund any retirement vehicles available to you first. Not only will you increase your chances to qualify for aid, but you can deduct contributions in the year you contribute and the money grows tax- deferred. The new rules for traditional and Roth IRAs also allow penalty-free early withdrawals for some college expenses.