I wrote earlier about our plan to use cloth diapers. They are working great.
We even found a local supplier, Cloth Diaper Outlet, that has cute cloth baby wipes.
We wound up only getting the bumGenius 3.0 diapers. A relative bought us a set of 24 as a present. They work flawlessly and even fit a six pound, one ounce newborn. We use Bummis bio-soft liners to make cleaning the diapers easy and (at this point) not messy.
The choice of laundry soap used on cloth diapers is very important: most detergents will ruin a cloth diaper's absorbency. We use Charlie's Soap which is more expensive than normal laundry detergent, but when ordered in gallon size and used in a front loading machine it is not very costly. Also avoid normal fabric softener sheets: use dryer balls to soften fabric and reusable anti-static cloths.
Other equipment includes a "wet bag" to use as a trash can liner for dirty diapers (the bag goes into the laundry with the diapers, so own two), a space heater since warm air on a baby's tushy makes for a more quiet and happy changing, and a thermos pump for keeping warm water available to put on the cloth baby wipes. Finally, the diaper cream with the fewest strange ingredients seems to be Blairex's Butt Paste.
Oh, and I now have a DadGear "Sport Bag" sized diaper bag which works as both a messenger bag for my teaching materials and diaper bag.
UPDATE: Two comments about diaper creams. First, because diaper creams will clog up the absorbancy of cloth diapers it is important to use disposable diaper liners if a rash prompts you use diaper cream; however, the disposable liners cling to the baby's skin, which is not what you want when trying to cure a rash. Second, after a few weeks of use ti seems Blairex's Butt Paste does not have any advantages over plain zinc oxide ointment.
UPDATE 2: Hi, Heather! I do not think the soap was to blame for the rash. Rather, our son had a couple very wet nights and the Bummis bio-soft liners cling to him so much when wet. Since the rash was slightly yeasty our pediatrician told us, twice a day for 2-3 days, to use a mix of 1% hydrocortisone cream and generic Lotrimin cream (with a disposable diaper so the cream does not hurt the liner-less diaper). This did the trick. We're now trying to use the cloth diapers without the liners.