We spend more than we ought to, but here are my attempts to keep the costs down:

cloth diaper

breastfeed

challenge yourself to only buy (or borrow) ONE huge plastic monstrosity per baby stage (for us it was swing, jumparoo, exer-walker)

when you do buy things you'll use every day (crib, highchair, carseat, stroller), buy the highest quality you can afford, so you can use it a long time and won't have to replace it (our highchair, for instance, is now a toddler booster, and eventually will just be a regular "kid" chair at the table - the svan chairchair)

you don't need as many clothes as you think you do

we try to keep the toys to one small container per living area - when they start getting to be too many, we give away/store it for later/throw away crappy stuff. With this in mind, I also buy far fewer toys and hardly any plastic ones, because they're usually on the big side and so don't fit in the containers very well.

Oh, and I only buy clothes on sale. What does she care that it's last season's romper??

I wish we would have held off on buying a crib...we only used it a handful of times (when I was in a phase of reading to many "how to get your baby to sleep" books). We mostly co-slept...and now (at 16 mo.) he sleeps on a mattress on the floor. The crib holds his stuffed animals.

The one bigger ticket item I am so glad we splurged on is our stroller. It is easy to maneuver (even getting through non-automatic store doors!) and will last him for years.

Other $ savers for us:

Breastfeeding

Target (for clothes, target brand diapers, & target                 babywash...it's only $1!)

Hand me down toys

Thinking twice about purchases (for example, rather than buying the cute Elmo sprinkler for $10 we bought one in the garden department for 1.79)

Not buying real shoes until he was walking

Breastfeeding is a big one, but also making babyfood. It's a bit of extra work, but we've saved a lot of money. For example, I bought a huge butternut squash for $1.75. It has yielded about a serving of baby food per day for two weeks. And if you mix with cereal or another homemade item you can really stretch out the homemade stuff.

My kids' clothes have been about 75% hand-me-downs. We are lucky, because our family friends have a boy and a girl, so we've received huge bags of clothes for both kids. We also saved money by not buying two of everything for our twins. They can take turns (so far). Breast feeding both of them saved us the expense of formula.

Like HappyMama, I wish we hadn't spent money on two cribs. They slept with us for a while, and still sleep on the mattress on the floor.

Garage sales!!  Just the other day I went to buy some shoes for my 2 yr old daughter and chose the ones that were on sale for $8 instead of $15 like every other pair.  They ended up giving her a blister.  So when I saw a bunch of shoes at a garage sale for 50 cents a pair I got her a couple pairs.  Then if they don't fit right I am only out 50 cents.  They actually a better quality than the $8 payless ones.

Definitely breastfeeding.  Definitely buying good quality gear that can be used with another child or ebayed.  Definitely hand-me-downs.  Definitely buying clothes on clearance a year ahead.  (If I see a great deal, I'll buy it no matter what size it is.  It'll fit her eventually.)  For girls, I love jumpers that can be worn with either a long or short sleeve top underneath because they can be worn in every season, and I love dresses because they can start out long and then can eventually be worn with jeans/khakis/leggings underneath when they get too short.  And even though we have a girl, we're planning on another child so I buy as much as possible in gender-neutral colors that could potentially be worn by a boy later-especially with big-ticket items like winter parkas and snowpants.  Also, I'm a firm believer in "less is more" with kids' toys.  We don't buy battery operated toys.  The few we own were given to us as gifts.  A set of wooden blocks forces kids to use their imaginations, lasts virtually forever and is much cheaper than all those supposedly "educational" battery-operated toys out there.  (Not to mention, no batteries to continually replace.)  

At first, all a new parent needs for a baby are diapers, and a place to put the baby when he/she isn't being held.  

We saved money the second time around by not buying the swing, not getting a high chair until he needed it.  I read reviews of things before going out and getting something that would just sit there or was poor quality.  

Nowadays, it is harder to find good quality used clothes (my boys wear 5 and 7s).  But they are out there.  And I second the garage sales.....love them, for toys and bikes.  I also love e-bay.  

At first, all a new parent needs for a baby are diapers, and a place to put the baby when he/she isn't being held.  

We saved money the second time around by not buying the swing, not getting a high chair until he needed it.  I read reviews of things before going out and getting something that would just sit there or was poor quality.  

Nowadays, it is harder to find good quality used clothes (my boys wear 5 and 7s).  But they are out there.  And I second the garage sales.....love them, for toys and bikes.  I also love e-bay.  

I second ShaLO on making your own baby food. We had a little cuisinart on the counter and would grind the adult meal to the right consistency. There is always enough left over for a little guy, no worries about how long a jar has been in the fridge and the end result, besides saved money, is that my two year old actually eats a varied diet, without my having to bake spinach in brownies.

Having all boys has certainly helped, too. With #3 on the way I can safely say that we need nothing. I've even got the cloth diapers to reuse.

Graig's List.  I don't buy any big ticket items new anymore.