My dh and I love to travel... both of us traveled the US and Mexico, and lived in many states before we met... then traveled a lot together before the kids were born.
We brought our older son to Costa Rica for 6 months when he was 2. It was great. We did a lot of traveling there and in Nicaragua and Panama.
Actually, it was pretty easy w/him along... a bit more "stuff" though w/ diapers, toys, etc...
He was awesome on planes, buses, taxis, hiking, etc...truly open to the experience.
We have taken a shorter road trip w/ both boys... it was a bit more work w/ 2.
We are planning a trip to Europe sometime in the next year... and back to Latin America to live in the next 2-3 years.
We always travel on the cheap! It is always more real, more interesting... by this I mean we never stay in resort-type places... often rent cheap cabanas, camp, inexpensive motels, sublet a place, stay at hostels, etc...
The Lonely Planet guide books have great info on many different types of places to stay in just about every country around the world. I highly reccommend these books!
Planes can be expensive so shop around!!
Renting a car is a good idea if you plan to see a broad area, taxis can get pricey!
I've done tons of hitchhiking as well... which is cheap, but you may not want to w/ a baby... although I did some w/ ds...
travel by bus or train can save a lot of money... buy your food at the market and not resteraunts... if dining out, check out where the locals go...
Hope these tips help.
I say go for it if you have the time and money!