If you are going to contribute any significant amount and invest it in something that will grow, the 529 has the advantage of not triggering any tax issues for the grandchild.
We had custodial accounts for our kids (which the grandparents also contributed to) and they triggered significant "kiddie tax" payments over the years (which of course we paid for them rather than taking it out of the accounts). Given that nearly all occupations in the 21st century require some post-high-school education, the likelihood that this would not be useful to your grandchild is quite small.
Interestingly, although not necessarily relevant, I heard recently through our local United Way that if a child has even a very small ($25) college fund set up at birth, they are twice as likely to attend college than those without such a fund. It sets an expectation that changes the way they look at their future.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
ER'd Oct. 2010 at 53. Life is good.