Outfitting children
You can put together a nice kid's wardrobe for very little money, especially if you're willing to think creatively. At the last baby shower I went to, I watched the prospective parents open gift after gift with clothing the baby would probably wear once (at least a dozen 3 mo size dresses, and the baby was 9 pounds...). I know it's tempting to give cute clothes like that, but it seems such a waste that no one thought to spread the sizes around and give size 6 or 12 month clothes.

Of course, it will vary by your climate, but if you have good access to a washer, a summer baby (up to 6 months) really can get by quite happily with:
8 - 10 t-shirts or onsies
3 - 5 light footed one piece sleepers
diapering (I'll let our diapering expert speak to cloth, but I'm guessing about 3 dozen diapers and about 6 diaper covers)
3 - 5 pairs of socks or booties (these could be omitted in really warm climates)
1 - 2 sunhats
1 - 2 nicer outfits - optional (dresses, pant suits, etc.)
If you live where the summer can turn cool, get fewer t-shirts/onsies, possibly more socks, use the light sleepers on cooler days, and get 2 - 4 of the heavier blanket sleepers.

For a winter baby under 6 months in a cold climate:
3 - 6 t-shirts or onesies (these can be worn under other clothing for warmth)
3 - 5 light footed sleepers
4 - 6 heavy blanket sleepers
1 - 4 warm pants suits (I suggest either a stretchy knit or a sweat suit type)
1 - 2 snowsuits
1 - 2 sweaters or jackets
5 - 10 pairs of warm socks or booties
1 - 3 warm knit hats
1 - 2 nicer outfits - optional
Diapering
Further south, you can skip the snowsuit, and get fewer socks, but you may still want the blanket sleepers. In really warm climates, 1 or 2 blanket sleepers for the few cold nights should be enough, but more of the footed sleepers

All of these items (except possibly diapering) can be commonly found almost new at yard sales and thrift stores. Just be sure to wash them a couple of times appropriately before using. I could probably outfit a summer newborn or size 6 month baby for less than $20 (barring diapering) from most of the thrift shops near me, and with clothing that was hardly worn. For a winter baby, it might run $25 - $30 (other than possibly a snowsuit) if I was unlucky that day. Oh, this list is based on the idea that you'll be able to do laundry at least every 3 or 4 days (there should be enough to go longer, but babies sometimes go through clothes incredibly fast). If you may be going a week between washing, you may want to double the t-shirts, sleepers, pant suits and socks/booties.

For a 6 - 12 month baby, you'll want clothes they can crawl in. For summer, about the same clothes as for the under 6 month baby, except probably 4 - 6 pairs of light pants to protect their knees when crawling and 3 - 10 bibs. For winter, again about the same, except skip the lightweight footed sleepers, and get 4 - 6 pants suits with long sleeves (short sleeves in warmer climates) and the bibs. My opinion is that a baby that isn't walking still doesn't need shoes, but that's between you and your doctor. If you live where the summer can turn cool, get fewer t-shirts/onsies, possibly more socks and pants, and add 2 - 4 of the heavier blanket sleepers and maybe a jacket. I really recommend thinking against putting a crawling baby in a dress unless you really enjoy frustrating the poor thing and want her physical development slowed. For a photo or something like that, fine. But I challenge YOU to get in the floor and try to crawl in a dress.

From one on up, most kids can get by with:
6 - 10 t-shirts or onsies (long-sleeved in winter)
4 - 8 pants or shorts
3 - 6 sleepers
diapering or 6 - 12 training pants or underwear
4 - 8 pairs of socks or booties (these could be omitted in really warm climates)
1 - 2 pairs of shoes
1 - 2 hats
1 - 3 nicer outfits - optional (dresses, pant suits, etc.)
2 - 4 sweaters or sweat suits in winter
Winter gear appropriate to the climate

Most of us like to get our kids SOMETHING nice, but keep in mind how fast young kids grow out of things. And ask yourself are you dressing them up for THEM or for yourself. Remember most of those outfits never get worn more than a couple of times, you can buy those nice items almost new. Also, if you're frugal in buying their everyday clothes, you'll have extra to buy something extra nice when you do want it. If your child is in a school situation, you may start getting pressure to buy clothes that are more "fashionable". How you handle that is up to you. As my kids were never in school, we never had any real pressure about clothes.

If anyone spots where I've left out something vital, let me know...