I use cloth, but I use prefolds. DS has sensitive skin and really doesn't do well in disposables, so we've used cloth (at first we had a cloth diaper service) since he was born (I suspected he'd have the problem as I had it myself as a baby). We use disposables when we travel, for convenience, and I'm always happy to get back to my cloth.
I love prefolds and covers. I think it's a super flexible way to diaper, I can layer in as much as I need to be absorbent depending on the situation.
I did a lot of reading at the diaperpin and green mountain diapers before I bought what we use currently, which is (for a 20 month old) 24 organic unbleached brown edge prefolds from green mountain diapers ($80), 6 green edge toddler sized white ones (night time) ($15?), about 6 hemp doublers (night) ($15); 4 thirsties duo covers and 4 thirsties v.2 covers ($90), 2 pail liners ($30). For an infant I'd have way more diapers, like 48 or so. I wash ever other day. Put the diapers in and make sure the wash is done before I go to bed, so I can hang up the covers (which I don't dry in the dryer every time to make them last longer) and have them dry in the morning.
As far as the environment goes, I think that it's not as clear cut as people assume in terms of the positive or negative environmental impact of cloth diapers. Bill Nye did a segment on his show last year about this. He concluded that there wasn't much difference, but that if you're using disposables using unbleached ones will make a big difference. For us, the amount of money that it would cost us to pay for the disposables to be collected in our city was going to be high, so it was a typically uncalculated cost of disposables (garbage costs in our city are HIGH!)
If you go with cloth. I found this cool DIY version of the poop sprayer mentioned above (which runs about $36).
http://gidgetgoeshome.com/2008/08/25...iaper-sprayer/