I do $300 per month for three kids, plus $10k per year lump sum divided between them. My goal is to fully fund four years at our flagship state university tuition, room and board. Any difference from going out of state or to a private school will need to be made up through work, scholarships, grants, or loans. My kids are 13, 9, and 1 and so far I'm on track to meet that goal. Every year I check the cost of attendance at the state flagship university and adjust the plan as needed.
As some others have mentioned, part of the plan is to free up cash flow by having the mortgage paid off before my 13 year old heads off to college. So the savings plus cash flow will be used to fund college for the three.
Also, Slate-WA, your friends are right that you could need to co-sign loans for your kids to attend certain schools. If your income is high, and your EFC (expected family contribution) is high, your kids can only get limited loans on their own. I think it's about $30-$35k total now? If they want to go to a school that costs more, and your EFC says you can "afford" it (notice how that's in quotes), then their only option will be private loans that you co-sign. The government sees paying for college as part of a parents responsibility, and it doesn't care if a parent has decided that they won't pay. The parents income and assets will count against the child for the purposes of calculating aid.