I would like to open a custodial 529 to pay for college tuition. Will the capital gains be tax free like in the regular 529 or will it be subject to the "kiddie" tax?

Q. Will the capital gains be tax free like in the regular 529?

A. No.

Q. Will it be subject to the "kiddie" tax?

A. Yes

There is no such thing as a "custodial 529". You either have a 529 Plan (also known as a QTP - Qualified Tuition Plan) or you have a UGMA (or UTMA ) custodial account. 

For 529 plans, there is an “owner” (not  a "custodian") (usually the parent), and a “beneficiary” (usually the student dependent).  There is no annual tax reporting of interest, dividends  and capital gains. . You only tax report when there is a distribution from the account. The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q. The 1099-Q gets reported on the recipient's return**. The recipient's name & SS# will be on the 1099-Q.  If your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution, then none of the distribution (including the earnings portion) is taxable.   

**Alternatively; you can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses,  to cover the distribution.  When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. 

For a UGMA account, the earnings (interest, dividends and capital gains) are reported annually and only on the student's tax return.  You do not report taking money out of the account. If the earnings are large enough (currently over $2100 per year), the kiddie tax is applied.  With a UGMA account, the funds belong to the student.  With a 529 plan, the money still belongs to the parent.