NL10 - AA in CO facing aggression

[littlefinger]

How's my play here? Villain is 20/5. I'm thinking he probably hit a set on the flop.

Party Poker
No Limit Holdem Ring game
Blinds: $0.05/$0.10
9 players
Converter (http://www.neildewhurst.com/hand-converter)

Pre-flop: (9 players) Hero is CO with A/images/graemlins/spade.gif A/images/graemlins/diamond.gif
4 folds, MP3 calls, <font color="#cc0000">Hero raises to $0.5</font>, 2 folds, BB calls, MP3 calls.

Flop: 5/images/graemlins/diamond.gif K/images/graemlins/heart.gif 7/images/graemlins/heart.gif ($1.55, 3 players)
<font color="#cc0000">BB bets $0.6</font>, MP3 folds, <font color="#cc0000">Hero raises to $1.8</font>, BB calls.

Turn: Q/images/graemlins/club.gif ($5.15, 2 players)
<font color="#cc0000">BB bets $1.5</font>, Hero calls.

River: Q/images/graemlins/heart.gif ($8.15, 2 players)
<font color="#cc0000">BB bets $8</font>, Hero folds.
Uncalled bets: $8 returned to BB.

Results:
Final pot: $8.15

[IAGTTAYM]

Stacks?

Raise more on the flop, 2.75 would be pot-sized.
As played I'd fold the river. I really cant see him v-betting for pot with something worse then 1-pair.

[Spenda]

Turn bet-size make it look like a flush draw, I shove over and embrace the variance

[littlefinger]

My stack is $10, his $18 or so.