First of all, I'm rather hesitant to add to this on-going plot, because honestly, this would end up just another being another 5-cent worth of opinion (inflation forces me to upped it from 2 cents). Having gone through the whole shebang, and a postdoctoral appointment, and looking for a job afterwards, I can only give you an anecdotal description on this, so take it for whatever it is worth.
I enter into this because there appears to be an over emphasis on "Ivy League" type schools. What is even more astonishing is that this is going on at the undergraduate level. Now, there is certainly nothing wrong with that, and nothing wrong with wanting to go to a prestigious school, with distinguised faculty, etc, etc. However, to be blunt, if you are seeking an undergraduate institution, it makes no difference (to a first approximation) on where you go! Honest! It really doesn't matter how many Nobel Laureates a school has, or if it has so much research money. There's a good chance that as an undergraduate, you don't see any of those.
What you should be looking for is an institution that excels in TEACHING. Ask around if there are good instructors there, if their undergraduate labs are well-equipped, if their TA's are well-trained, and that there are enough of a variety of courses to allow you to take them during your senior year. Look in journals such as American Journal of Physics, and European Journal of Physics, and Physics Teachers, etc. and figure out if there are anyone from that particular institution doing any reserach in physics teaching. That would be a good clue in how much that institution/department emphasize good teaching methodology. You will be surprised that some of the best physics teachers around are not from high-caliber, well-known schools. Assuming that your undergraduate education is a stepping stone to go on to graduate school, how well you understand your undergraduate curriculum is of utmost importance to increase your chances of getting into the graduate school of your choice. Now THEN, going to a top-ranking school will make a difference.
The only advantage that I see of going to large, well-funded school is that you may have a chance of participating in some sort of a research program, or initiate your own indendent study with a professor. You do need to do something extra like this if you intend to go to a prestigious graduate school later on. However, even in this instance, going to a smaller school still isn't a major handicap. The National Science Foundation and the Dept. of Energy sponsor internships every summer for undergradutes in the sciences, engineering, mathematics, and computer science that allow these students to do research work at various US National Labs. I have encountered many students from smaller schools that managed to obtain such sought-after internships - just think of how well that would look in your grad. school application. So even if you end up going to one of those small schools with limited funds and opportunity for extra research work, there are many means to still make yourself competitive with others who went on to bigger, more well-known schools.
Moral of the story: Do not restrict yourself to Ivy League schools. There's nothing wrong with that, but with everyone clamoring to go there, you are losing the whole aim of an undergraduate education in physics. Look for good physics teachers, and go there! They are the ones that have a direct impact on your physics education, not to mention, the ones that you may end up requesting letters of recommendation. A smaller student body in a physics dept. means that there's a good chance these instructors know you a lot better personally and can write more than just a "form" letter of recommendation. And we already know from the various previous postings on here how important those can be.
Good luck!
Zz.
