Disclaimer: We are very careful, as much as we can, to limit our daughter's exposure to toxic substances. We eat organic food, use non-toxic cleaning products, etc. etc.
That said, I am a little concerned about the number of comments on this thread about how your children are unlikely to "catch fire", there are no open flames in your home, etc. When our daughter was 9 months old, she was sleeping in her crib (she used to spend the first part of the night in her crib, and then co-sleep with us) when the house next door burst into flames. By the time I woke up from the light of the fire through my window, the dormer ceiling immediately over her crib was burning. If I had woke up a minute or two later, I would have been extremely grateful for the extra time afforded by her flame-resistent crib mattress and bedding. (Our smoke detectors hadn't yet gone off because the fire was external to the house.) I am sharing this only to say that the risk of fire may be small, but not non-existent. I never thought it would happen to us.
The reason that children's bedding and sleepwear is treated with flame-resistent chemicals or sold to be tight-fitting is because sleeping children can be at risk from fire, and buying them extra time prevents more serious burns and even death. That said, my feeling is that we need to invent/develop safer fire-protecting sleepwear and bedding, because it's unacceptable that the trade-off is between safety and health.
And please, be sure your family has an escape plan from your sleeping area(s), and if your children are old enough, your children know what it is and can execute it if necessary. Take them to a fire station and introduce them to fire fighters so they aren't scared of them. Make sure your smoke detectors are functional.
