Cloth diapers are much better for your baby.  Without the chemicals used in disposable diapers, most cloth-diapered babies experience less diaper rash symptoms and when they have a rash, they're typically less severe.

Babies that are diapered in cloth, tend to potty train faster.  Because the feeling of "wetness" isn't masked by chemicals, your toddler get's the necessary feedback of when an accident has occurred which increases their understanding and thus their ability to learn to use a real toilet.

Better for the environment. Cloth diapers can be used and reused over and over again.  Every cloth-diapered child means one ton less waste in the landfill.

Economics Cloth diapering costs more initially, but over time can save you as much as 75% over disposables.  Think about what you could do without having to spend $75 - $100 a month on disposable diapers? Your savings are also multiplied when you use them for subsequent children.  There's no need to buy a whole new diaper "wardrobe" for your second child.  You can't do that with disposables.