My previous employer, Cambridge Associates, used Vanguard for its 401k plan. Cambridge Associates is an investment consulting company that helps many of the country's most important non-profits (think big hospitals, museums, ivy league schools) and wealthiest families manage their money. It's Cambridge's job to pick good managers - and Cambridge picked Vanguard for its own retirement funds.

Why?

Most importantly: Vanguard offers a wide selection of low-cost funds.

Also: I found Vanguard's website and customer service to be superb.

Though I no longer keep my 401k with Vanguard - I do keep an IRA and Roth IRA there. I'm a fan. Investors who are a lot smarter than me are also fans.