Cloth does a good job as long as you change your baby as soon as the diaper is soiled. Disposables, with their new absorbent gels, can handle large amounts of fluid without becoming saturated, so you can leave your baby in one longer without causing him as much discomfort.
Disposables draw liquid away from a child's skin, deep into the gel-containing layer of the diaper.
This keeps your baby's skin drier longer and minimizes contact with urine and even some stool. Some disposable diapers are made with a breathable material that allows for air flow to the infant's skin. And some also contain a substance that coats and protects the skin just as a barrier cream such as Balmex or Desitin would. If your baby develops a skin rash while wearing disposables, it may be a reaction to this substance, or it may be from rubbing against the leg gathers or tight waistbands. Try a different brand or change to cloth diapers.