I wanted to put together what I've learned from friends, other Seattle area moms, the diaper pin and other websites, and a cloth diapering 101 workshop I took this past weekend at Birth and Beyond.
My mom, a pediatrician, encouraged me to try cloth diapering because she noticed that her patients who do it are less likely to develop diaper rash. Since I'm taking the year off from work, I thought it was worth trying as I would have more time to devote to it and it would save us money - the workshop estimated it would save us approximately $2,000 compared to the cost of disposable diapers.
I decided to do some math to verify this for myself. According to what I found online, babies go through approximately 5-6 diapers per day for the first year. That would be about 2,007 diapers in a year.
Amazon has some of the lowest prices for diapers, and they cost approximately $0.20/diaper. That's about $401.50 for a year of diapers - and of course, this is assuming you can get exactly 2,007 diapers in all the right sizes, which probably won't happen. (And that you get free shipping.) Since potty training doesn't usually happen until after the age of 2, let's make that $803.00 minimum for 2 years (some websites estimate the cost to be closer to $1200 for 2 years.
Cloth diapers prices might vary even more than disposable. It could be as cheap as $6/diaper (for pre-fold + cover bought used) or as much as $25/diaper (for pocket or all-in-ones bought new). Since they are re-used, you only need roughly 24-36 total cloth diapers which could range in cost from $144 - $900 plus the cost of washing and drying them.
Diaper Pin has a cost comparison calculator that estimated that it will take me over 7 months of cloth diapering to break even with the cost of disposable and I would save $356.00 after 1 1/2 years of cloth diapering. Of course, this is if I used the cheapest alternative. In addition, you can save even more money if you either re-use the diapers for multiple kids or sell them to other moms on Craig's list (which can re-coup you roughly 50% of what you invested if they're in good condition). In the end, it looks like if you do it smartly, and/or you stick to it for long enough, you will save money cloth diapering. They can also be really cute compared to disposables :-)