Investment Options
Perhaps the biggest disadvantage of Section 529 savings plans is their inflexibility.  You can't directly manage the funds yourself; you must choose the state's contracted money manager (TIAA-CREF, Merrill Lynch, Fidelity, Strong, etc.) and the limited investment options offered. The number of investment options varies from plan to plan, ranging from only a few funds to almost 30. Also, once you've chosen your asset allocation, you can't change the mix for 12 months. If you're not happy with the plan itself, you can transfer to another plan -- but just once every 12 months.

Many states provide an age-based asset allocation investment program, combining equity (stocks) and fixed (bonds, cash) assets in the investment fund. The lower the age of the child, the higher the percentage of equity (potential higher returns); as the child gets closer to the 'normal' college age of 17-18 years old, the asset allocation mix moves toward fixed assets (low risk).

Several states are selling Section 529 savings plans through brokers and advisors, which drives up fees and sales charges. Some states charge an enrollment fee (Maryland charges $90) and/or have an annual account fee (Alaska charges $30); all plans charge expense ratios for the management of the investment options.  Expense ratios can be as low as 0.28% - 0.30% (Utah) or as high as 1.81% - 2.49% (Wyoming).

Withdrawals
If you remove the earnings from the Section 529 plan and decide not to use them for higher-education expenses, you'll not only pay income taxes on those earnings, but you'll get zapped with a 10% penalty. However, most plans will allow you to change beneficiaries. So, if your child decides not to attend college, you can transfer the Section 529 plan account to a new beneficiary who is directly related to your child (including cousins, step-relatives, and in-laws).  In addition, if your child receives a full scholarship to a college, withdrawing the money will not be subject to the 10% penalty (only federal and state income taxes).