I just remembered a blog post at CashMoneyLife - Cloth Diapers vs. Disposable Diapers. I had come across it a little while after posting my answer to a question at moms4mom.com - What can I expect to spend monthly on disposable diapers? And what do/did you spend? and I had linked to it from there, too, since it contained some information about disposable diapers.
However, since you're asking about real nappies, i.e. cloth diapers, it is also relevant to your question, since it was discussing both kinds of diapers. Here are some choice excerpts from the CashMoneyLife post:
The beauty of cloth diapers is
that while the upfront cost is much
higher, the ongoing cost is much
lower. Once you purchase them you are
only paying for laundry detergent and
the energy to wash/dry them. (Note:
I've also known people who have passed
along cloth diapers to other family
members or bought/sold them on
Craigslist, both of which could be a
cheaper option if you are willing to
Which is better? I think they are both
great and I encourage you to try cloth
if you have young children. The cost
and environmental benefits will make
it worth your while. Then use
disposable diapers for what they were
intended for: a convenience.
There are also some excellent comments following the post by readers who have also used cloth.