I used to work at Vanguard about 15 years ago, and they're one of the top rated mutual funds because they follow the index and don't f' around with your money by doing trades. Because of that, they tend to do better than people who think they know better.

That said, I have all my old 401k money rolled over into T Rowe Price and USAA funds. The most important thing is: I can control and move things around, and I'm not stuck to the generally craptacular set of choices that most companies 401k plans lock you in to.

Definitely roll it over into an IRA. Just do a little research, you'll be fine with the choice of funds at USAA, TRP, Vanguard, Fidelity, etc.