Other nice features of the 529 is that the contributor retains control of the funds (not the beneficiary), how flexible it is when it comes to changing the beneficiary (once per year), and that it is relatively lightly counted in the 'Expected Financial Contribution' of the family (Unlike the Uniform Gifts / Transfers to Minor or Coverdell ESA). Although you should consult a CPA for your own planning, I am funding a 529 for the oldest child, and then plan to transfer any 'left-overs' to the second child, and also allows for flexibility in the range of expense outcomes and options. I do not plan for the 529 to cover 8 years of out-of-state private college, but do hope to have enough for 8 years in-state public (4 years x 2 children).
According to
http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/11/14/4-things-to-consider-when-changing-529-plan-beneficiaries:
"... families who want to change the beneficiary can choose among multiple generations, she notes. For instance, if a couple's oldest offspring receives a scholarship, they could reassign funds to nearly anyone else related to the child, such as siblings, parents, grandparents, first cousins, aunts, and uncles, McNeill says."
Any 529 funds left over after the 2 children attend college can be used by parents, or even grandchildren, I believe, and there is no 'required distribution' age (currently). I'm not sure what happens if the 529 owner dies, I assume that's the one downside that penalty and interest applies when it gets transferred...