IRA? Heck no, unless you want to pay taxes and possibly an early withdrawal penalty when you take the money out to pay for college expenses. Don't worry so much about the impact on financial aid, as a 529 is considered a PARENTAL asset (assuming you own the 529), which is thus counted less against FA than a student-owned asset. Tax-free withdrawals for qualified higher education expenses should, in most cases, trump whatever minor negative impact a 529 may have against FA.
Bright Directions has had very good results. Bright Start was recently revamped, which was badly needed as it was poor to mediocre. If you really don't care about state tax deductability, I am a big fan of American Funds (which is advisor sold--yes I am biased, and I am sure others out there will find a direct-sold plan to endorse).