We ran into the same problem (living in CA) but selected the California 529 anyway because it was run by TIAA-CREF, whom I have accounts with and like (and the fees were low). This past year Fidelity took over the plan and actually lowered the fees. I have yet to recompare, but I found the comment that the fees were too high interesting, since they were among the lowest when I last did a thorough check (~18 months ago). It seems it might be time to do another round of invest-igation.
One thing to consider. If you have relatives in another state that will be contributing (like Grandma), you can setup a plan in that state and let them get a tax break–assuming the plan is otherwise comparable. I hold out hope (but not my breath) that California will get on board and let us write off the 529.
