C.C.
Hi S.! I have a lot of experience with cloth diapering -- I used cloth to great success with my son for 18 months, and now I work at a store where I help folks choose which cloth diapers work best for them on a daily basis.
Which diapers to choose for your family really depends on what you are wanting to get out of the experience. You have to ask yourself, are you going to do it to save money? To save the planet? To reduce rashes and chemical exposure? Also, keep in mind that kids diapered with cotton diapers potty train (on average) a year sooner. My 29 month old has been potty trained since around his second birthday.
We initially chose cloth so we could save money, and so a diaper service wasn't for us. I priced it out and the cost was comparable to buying disposables. Tidee Didee which services the Portland area isn't all that forthcoming (at least on their website) about what cleansers they use, either.
All reusable diapers are going to save resources (except for possibly water used for washing, but we aren't exactly having a water shortage here in the Pacific Northwest, are we?). And with cloth you definitely are going to be exposing your child to fewer chemicals, reducing rashes. And any rashes that do occur are usually easily remedied by switching to a cleaner rinsing detergent and/or by simply changing baby more often.
With cloth diapers, you have an amazing array of choices. The most economical way to go would be to choose prefolds, which are the same style of diaper the diaper service would send to you, and add a waterproof cover. Make sure to choose a quality diaper, though. The low absorbency ones off the shelf at target or babies r us have turned many folks off to cloth diapering all-together.
There are also "pocket" style diapers, which can be stuffed with your choice of absorbency. They also come lined with fleece which adds a stay dry effect to the diaper. Some of them come in a "one-size" verson that can save you money in the long run, because they unsnap to get bigger as baby grows, so you don't have to invest in sizes small through large.
You could also, for simplicity's sake, choose what is called an "all-in-one" which is a diaper that is nearly identical to a disposable diaper in that it is absorbent on the inside and waterproof on the outside, except you will wash it instead of throwing it away. Convenience does cost more, though. The more "put together" the diaper is, the more it will cost (with all-in-ones at the top of the price spectrum, and prefolds with covers at the lower end).
We used prefolds purchased at a local diaper shop with the Bummis brand of covers. I liked Bummis (the "super whisper wraps") because they were darn near indestructible and could be washed with the diapers on hot. I did have a few all-in-ones for convenience on afternoons when my son would go to his grandma's house. Washing was easy. Every third day I did a cold pre-wash in my washing machine with a little bit of a pretreater (we used BacOut by Biokleen) followed by a hot heavy duty wash cycle with an additive free detergent and a thorough drying in the dryer.
My best advice would be to get out and do a little shopping so you can touch and feel the diaper ahead of time. Lots of folks will choose to use a diaper service for the first 6 or 12 weeks to get a feel for things before buying their own diapers. Also, don't buy 18 of anything right away (unless they are prefolds, because those can be used for burp cloths and cleaning, too). Buy a two or three of everything in the beginning, so you can get a feel for what works for you and your family. Then when you are ready for your next size, you will know what you love.
Best wishes!