E., my 3 1/2 year old son took Singulair on-and-off for about a year (ages 2-3). He's taken EVERYTHING imaginable for asthma, allergies, chronic ear infections, lower respiratory problems, etc. The Singulair (along with Albuterol) was by far the worst. It causes definite behavioral changes in him. Makes him hyper, super-sensitive, and generally ornery. When he's not taking it, he's a different child. We are fortunate that it's an 'as needed' medication and we can avoid it for the most part.
I think that like all medications, some have side effects on some kids and some don't. He also cannot take Claritin for the same reason, although LOTS of parents give that to their child with no problem. If he's not had a problem with it in the past, chances are he won't. There are a TON of kids who have benefitted from Singulair without any problems. And the research is really just getting under way and the 'warnings' are just that... there's not, at this point anyway, definite evidence that kids shouldn't take it. Sometimes it's just a matter of 'mommy knows best' (we OFTEN DO know better than doctors, despite what they may say!). My son's doc fought us on taking him off Claritin (this was when it was still a prescription... and when it became Clarinex) saying that couldn't be the problem. But we knew what we knew. And then found a lot of parents were seeing the same things.
Has the doctor offered another alternative. For us, for example, we now use Xopenex instead of Albuterol, which cuts down on the hyperactivity and other side effects. We never looked for alternatives to Singulair only because it was not necessary. Hopefully, if you see a problem or if it gets to the point where doctors become weary about prescribing, there will be an alternative.
I wish you and your little one luck. No fun having a sick baby!