My daughter's 529 is with Utah; I don't know if all accounts operate this way. The process of using 529 funds has been absolutely smooth, with questions answered immediately over the phone. I can choose to have money paid to me, to my daughter, or directly to her college. I have linked the 529 account to my checking account and to my daughter's checking account. I generally pay a qualified expense (such as room and board) myself, and then request the money from the 529 via a simple online form. The money is transferred to my checking account within a couple days. If my daughter buys books, for example, I will ask that the reimbursement be paid to her checking account.
Because my daughter has a tuition scholarship, she can withdraw money from the 529 account (up to the amount of her scholarship)without having to use it for qualified expenses. She must, however, pay income tax on the portion of that withdrawal that was investment growth (as opposed to the money initially contributed to the account). Since her income is so low, she hasn't had to pay taxes at all. If I had waited until she graduated and then had her receive all the excess money, instead of spreading it out over 4 years, there would have been a tax bite. (Note that I am having her receive this money because the 529 was a gift from her grandfather; if I had funded the account myself I would keep the excess)