sublimation would be easy to print full color onto baby items, but this only really works on white garments,
vinyl for baby garments i would not recommend, maybe plasitol transfers would work as well, but i would also check with what inks you are allowed to use on baby clothes,
direct to garment is best but is quite expensive to set up.
i would say sublimation from Epson or ricoh printer is most cost effective, i used to use the Epson r1900 with sublimation ink and heat press onto garment.
as most baby garments are white or pastel colors.
hope that this is some help...