I started out with newborn and small prefolds and newborn and small cotton bottoms wraps and I was obsessed with keeping the nappies as trim as possible for my teeny son (he was three weeks early). I hated when we went up a size and he was at the bottom of the size range on the nappy, because they went up to his armpits. I'm glad I didn't go with Mother-ease as I was advised at one point, I would have gone crackers trying to make his bum look smaller.
I got some small (up to 12lb) WAHM nappies to start me off but needn't have bothered really, as my baby was big enough for the "standard" size 1s right from birth (though I didn't really start using cloth nappies for a couple of weeks). Worth having if you don't like the big bum look though, I suppose.