Hi Robin and congratulations on bringing your little one home!!
My eldest and youngest had NICU stays. My eldest came home w/a very NASTY rash. The NICU gave us a pot of cream (their own formula) which included an antifungal because more likely than not yeast was involved. I'm not sure that desitin is going to clear up a persistent rash and I wouldn't use desitin on cds because I think it has fish oils in it which can cause build-up and even worse rashes.
My youngest came home w/an undiagnosed C. diff infection. She had chronic diarrhea and a SEVERE rash. Our home care nurse recommended all kinds of creams w/essential oils and zinc oxide. These things actually made the rash worse. What really worked for us was kindhearted women's claymazing powder. This kept everything as dry as possible and allowed for healing.
I truly believe that cloth is better. It is gentler on preemie skin (depending on how preemie your baby is his skin may be very thin and easily irritated by disposies) and as long as you change him frequently wetness is not any more a problem than it would be w/disposies.
Here are some pics of my micro at about 3 moshttp://img.photobucket.com/albums/v1...060015cdnn.jpghttp://img.photobucket.com/albums/v1...160024pbkt.jpg