Naming your spouse the beneciary of an IRA appears to be the prevailing wisdom. This appears to provide your heirs the most flexibility. A spouse beneficiary, and only a spouse, can rollover the IRA and the spouse can name new beneficiaries and his/her own method for computing minimum distributions.
There is an excellent article written by Ronaleen R. Roha is February 2000 issue of Kiplinger's magazine (page 94) which goes into great detail on the subject.