I also love blue and white china and usually mix it with plain white plates to tone down the granny. It also accents well with all sorts of things.

I love blue and white too. there are many ways to present it in a modern way.
Mix with more modern pieces like this pic from the Chicago Tribune.

Contemporary setting

Or

Set table with a dark red cloth or runner, use Spode, and tall thin black glasses/ or black wine glasses, and a few other black pieces.

Black tumblers

Set table with a black cloth or runner, use turquoise glasses and accents.

Use turquoise cloth, or runner, Spode, black goblets/tumblers.

Black wine glass

Navy cloth, or navy bordered burlap runner, Spode, golden pottery goblets and accents.

Pottery goblets

Gold cloth, Spode, navy or black accents.

Great question Jen!

We deal with this type of dilemma all the time. Just how exactly do we make traditions-old interiors appeal to the current sensibilities? For best results, make sure that from the very beginning, your approach and mindset is also current. From pattern selection on the porcelain, to the shape of the plates themselves - you'll be happier with the results if you've been careful with your planning from the very beginning.

Arrange your plates in geometrics, square patterns for example. Place rows and columns, so that perhaps you have four rows across, and four columns up. The top row can have your smallest plates, the bottom will have the largest.

Another arrangement for the contemporary eye is the constellation pattern, where the plates are arranged in a manner that appears as if you had just thrown the plates in the air, and they magically landed on the wall in a broken up stellar pattern. Beautiful.

If you actually plan on setting the table with blue and white, same thing - from the beginning plan your aesthetic with the proper mindset. Use the blue and white as fun accent to your table, don't set the entire table in blue and white because that look is taken - by grandma. Use white plates with greek key patterns, red, grey or yellow napkins, weathered whicker place mats, curry yellow, red, grey or green stained glassware, and voila! A chic table for the younger blue and white lovers!

For more on Blue and White for the young, or the young at heart, check out my website. For wonderful examples of what the latest generation of designers are doing with Blue and White, you can also visit their websites. One such great designer is Jonathan Adler.

Thanks to Jen for the question and to pdgroupdesigns for the suggestions. I'm also struggling with this after moving from a cottage-y condo to a MCM home. I have my grandmother's well used blue & white Staffordshire boxed up and would love to bring it back into my life. I think I'll try a few floating shelves or ledges, stained dark to match the posts and beams with the sort of geometric arrangement you suggest. I have many sizes of plates (luncheon, salad, soup, dinner, dessert, etc.) so this should work. I'll keep the soup tureen, covered vegetable dishes and other fancy serving pieces put away.
I'll continue to follow the thread for other suggestions.

Keep it simple. I inherited a set of Anysley Pembroke plates from my mother in law along with monogrammed silver. They are lovely, but very traditional. I usually use them for Christmas or Thanksgiving when I have a lot of guests. I use a plain white tablecloth and mustard yellow napkins. I've been collecting water gobbets from thrift stores for a while now and I set the table with an assortment of glasses. I have at least two of every style of glass so it doesn't seem so random. My mother in law only had the plates so I use plain white ceramic and clear glass contemporary trays and bowls from World Market.

I love the idea of red accents on the table with your blue dishes. Red glassware or serving pieces could be gorgeous. I think the shape is important. Squares and ovals will be much more contemporary and will break up the static look of all the circles.

Sit tight for a bit. MCM will seem "grandma" again in a few years and older styles will look fresh and radical.

In the meantime, check out 16th century Dutch style, including American Dutch Colonial. If you live anywhere near the Brooklyn Museum, visit their Schenck houses. The style mixes hand-hewn wood with blue-and-white Delft pottery.

I like mixing the old fashioned blue and white with modern geometric patterns. The contrast modernizes it a bit I think. Not to toot my own horn, but my business is all about taking vintage china and turning it into modern jewelry. www.materialandmovement.com.

Mix it up.Have fun with it. I have Willow, Delft, Asian, Danish modern blue and white china that I have been collecting since 1969. My table settings have some of each pattern with a contrasting color as background. Over the years I have used yellow, hot pink, lavender, and turquoise. Right now it's green thumb (Benjamin Moore). Grannies rule !