i am a student at a small (~12,000 students) state school. when i started interviewing (e.g. at washu, berkeley), i was really intimidated that all but 1 other interviewee was from a big-name school. i didn't feel that it put me at a disadvantage in my interviews, though i can't speak to the entire admissions process, since i haven't heard from most places i interviewed at yet. i felt like, in my interviews, being from a state school no one outside TN has heard of made it more interesting and gave me a chance to talk more about what kind of education and experiences i have gotten here. and, after a couple of interviews, i decided to be proud of my school -- i probably had to work a little harder to get those interviews than i would have if i had an ivy-league degree backing me up. maybe i would have gotten more interviews if i had been from an ivy league, but, as it is, i have/ have had 7 interviews out of 10 secondaries i finished -- the only schools who haven't offered me an interview are schools with fairly-strict in-state requirements.
as far as my education at a state school -- i think it's been pretty good. some of my classes could have been harder and prepared me better, but on the whole, i think i'm graduating with a good education. i am in our honors program, which accepts 21 students/year -- so i have had lots of small classes, great teachers, personal attention. i'm also required to write an undergraduate thesis, and i don't think that my friends at ivy leagues have to do that. it is really easy to get into undergrad research, either at the undergrad colleges or at the medical school. our biology honors department is really trying to get undergrads published so that we'll be competitive at good grad schools, so i was 2nd author on a paper in genetics my junior year. sure, i might have had even more exciting research opportunities at an ivy, but i was the only student in the lab, so i got a LOT of experience, which got me a job with the USDA for a couple of summers.
would i go here again? absolutely. after all, are you really going to think back on college in 15 years and think, "darn, i wished i had had to work harder in that molecular biology class"? nope -- for me, it's all about the people you meet, and i can't imagine NOT having met the folks here.