Oh, my new favorite subject! I am a newbie to CD too & at first found it COMPLETELY overwhelming, but thanks to mamas here & great resources on the web, I think I've pretty much got the hang of it
A few quick basics:
The cheapest way to CD is using prefolds & covers exclusively. Prefolds are what our mothers used on us- a thick rectangle of cotton w/ many layers sewn together. You can either get Chinese (CPF) or Indian (IPF). The difference b/w the two seems to be that Indian are softer & more absorbant, while Chinese might last a bit longer (I'm going w/ Indian). Also, instead of PFs you can use flats, which I think is a much larger piece of cotton that you fold in to many layers.
Covers are either PUL (some kind of water proof material) or wool. Brands you'll hear of PUL are Bummis, Prowraps, Bumkins, Mother-ease Air Flow, Bumpys, etc. You can buy wool covers (Aristocrats) or knitted wool called soakers. The nice thing about covers is that you don't need a new cover ever time you change a wet dipe.
You can get totally set up w/ this system for under $100 (inc shipping) here:
You get 36 prefolds & 6 Bummis. I'd spend the extra $10 to upgrade from newborn to infant/small size to last longer.
Other options... instead of prefolds, many people used FITTED diapers. These do the same thing as PF (absorb pee & hold in poop), but have elastic around the waist & legs to help hold in poop. Brands you'll hear are Kissaluvs, Muttaquin, Righteous Baby Fits Like a Glove (FLAG), umm? These are more expensive than PFs & still require a cover for waterproofing.
Then there are POCKET diapers like Fuzzibunz & Happy Heinys. For these have a pocket inside them that you have to stuff with an INSERT (the insert if what absorbs the pee). You can either use an insert made for the dipe (made of microfiber, hemp, or??) or you can stuff w/ a prefold, wash cloth, or anything else that will be absorbant. You don't need a seperate cover w/ these, but to wash, you must remove the insert. FYI- some stores will give you a microfiber insert free when you buy Fuzzibunz, so try to shop around!
Last on my list (but I'm sure there are others out there!) are ALL-IN-ONES (AIOs). These don't need inserts. I think the advantage to pocket diapers over AIOs is that you have more control over how absorbant you make the dipe w/ a pocket dipe (remember, the more absorbant the dipe, the bulkier it's going to be on baby's bum) & by taking it apart, it will dry faster after washing. Brands of AIO inc. Very Baby, Bum-Ware, Daisy Doodles, Rumpster, etc.
To save money, I'd highly recommend the Trading Post here (nothing wrong w/ used dipes!). Also http://www.diaperswappers.com/
Ebay has cloth dipes, too but I've heard you get a better deal if you use other sites. Also, if you're interested in PFs, I'm in a co-op where you can get unbleached IPF infant size $9.25/doz (other sizes too, prices vary) http://groups.yahoo.com/group/lct_diaper_supply/
Great sites for information include the diapering forum here http://www.mothering.com/discussions...221&order=desc
Sorry this is so long! Hope it helps!