I thoroughly recommend trying out cloth nappies. When most people think cloth nappies they think of the old terry or flanelette nappies that our mums / grandmothers used to use and while these are fine cloth has come a long way and there is a huge variety of nappies to choose from these days. You can find out just about everything that you could possibly want to know about cloth nappies here
www.ozclothnappies.org.
Modern cloth nappies work really well, they will save you money and they ARE better for the environment (even when you factor in water usage, most people forget to think about how much water is used to manufacture a disposable).
If you have any questions about cloth I am happy to answer them, we have been using cloth on my DS since he was 6 months old, he's now 5 and still wets the bed so still in cloth at night.