Here's my perspective, based on my personal experiences with two state schools, an ivy, and work beyond.
Life on Campus
-The more prestigious schools make for a much, much more enjoyable experience. Prestigious schools tend to have more / better academic events, community events, and other ancillary resources.
-The student body at prestigious schools is generally filled with much more interesting and intelligent people. It doesn't mean there aren't great students going to state schools, but a much higher percentage of your classmates will consistent of those who half-ass their schoolwork and their only extracurricular activity is drinking.
-The classes at the more prestigious schools are much harder, and cover a lot more material. In your classes, you will learn and accomplish a lot more, but it will also be necessary to work a lot harder (this could be a good thing or a bad thing, depending on your perspective).
-In general, the classes at more prestigious schools offer much more support in the form of smaller classes, more TAs, study groups, tutoring resources, etc.
-Academic opportunities outside the classroom may not be more available. With so many more / strong / interested students, if you're looking to pursue research with a lab / professor, or to achieve other markers of academic distinguishment, it can be more challenging at a more prestigious school. For a strong student at an academically mediocre school, distinguishing oneself is fairly easy.
-Bell-curve feedback and self-identity can be a tricky thing. At a mediocre school, a strong student may identify him or herself as the top dog, and put in a little extra effort to fulfill that vision. At more prestigious schools, sometimes the effort to reach the top of the pack can be so great, that otherwise strong students will settle to be middle-of-the packers. As a hypothetical but representative example, in certain classes at a prestigious school, it might take 2 hours/week of work to get a B, but 20 hours of work/week to get an A. At a comparable class at a state school, it might take 1 hour of work/week to get a B, and 4 hours of work/week to get an A. In this example, a student at the state school might opt to put in the four hours of work/week to get the A, while settling for 2 hours of work/week at the prestigious school for a B. All else equal, the state school student might then end up getting more out of the class.
-A higher GPA at a worse school may often look better than a lower GPA at a better school, even if the latter were ultimately harder to achieve.
-However, there are certain businesses/industries that hire nearly exclusively from top schools. I worked for several years for a consulting firm that hired a large number of undergrads for their first job, but only those coming out of strong schools (roughly speaking, if one were to look at the US News rankings, we only hired from the top 25 or so national universities and top 10 or so liberal arts colleges). If you didn't go to one of those schools, it was nearly impossible to get hired. Starting pay for a kid with no prior work experience was roughly double the national median income, and generally set people up for a financially rewarding career after that.
-On the other hand, as mentioned earlier in this thread, for grad school admissions and jobs that are themselves less about prestige, strong grades and research experience often are worth more, and those may be easier to achieve at a lower ranked school.
-I'm not in my mid-30s with an undergraduate degree from an ivy school and a graduate degree from a state school. I own a house and have a secure, well-paying job, so generally speaking things worked out for me but...
-My experience at a prestigious school was much more fulfilling than my time at a state school. I feel like I lived more in the four years there than I did in the 10 years after. It was such a great experience and I wouldn't have wanted to give it up.
-I did not enjoy my experience at a state school, and found the whole place kind of sad depressing.
-However, I believe that I would have had a more satisfying career had I done my undergraduate work at a state school. At the ivy, I was scared off from pursuing my fields of interest (CS/engineering) because of the intense demands and competition in those programs. I ended up settling for a course of study in math/econ, which has given me a fine career, but one which I do not find particularly satisfying.
-Academic achievement is a great way to get in the door, but after my first job, no one has cared what schools I went to or grades I got. At this point, my success is determined by my professional reputation and my ability to convey my value to a potential employer.