Are disposable diapers, diaper service, or home washed diapers better for environment and my wallet?

I think the question of whether they are cheaper and better for the environment depends on whether you use a diaper service or wash them yourself. At least in Colorado washing yourself the cost is about $1,000 for washing yourself vs. $2,500 for a diaper service and $2,000 for disposables. Once you factor in that the $1,000 is a one time investment in re-usable stuff, when you have a second kid the cost-per-kid of washing yourself drops to ~$650 (detergent and replacing any covers that fall apart). Washing yourself is a little more work, but it also means one less thing to buy at the grocery store and fewer trips to the trash dumpster.

From an environmental perspective...it somewhat depends on how you weigh the factors.

The Disposables angle

Disposables use a lot of water and bleach to process the wood and other raw materials that eventually become the diaper. And they are around forever. And most people throw the poo into the diaper genie along with the disposable which is not good because landfills aren't designed to process poo. You're supposed to put poo in your toilet before throwing the diaper in the trash. (I can imagine you might doubt me on that last point - check out http://mamatrue.com/2008/08/27/disposable-diapers-poop/ which has a good roundup of sources). I think disposables - and especially the diaper genie - encourage the whole "poo and diaper go in the trash" - so those are a bit of a systemic environmental frowny face.

Diaper services, more expensive, maybe no better for earth

Diaper services are more expensive without a doubt. The quality of the cloth inserts is not as good as the kind you can get if you wash them for yourself (wash yourself have microfiber, hemp, and cotton all mixed into one liquid sucking fabric while diaper services uses just cotton...which is OK but not awesome). Diaper services should be more efficient at washing than everyone doing it at home, but they probably also use somewhat stronger detergents than a typical home washer which are therefore questionable for the environment. They may also wash things multiple times to "really get them clean" while home people are just going to do one load.

Changes in poo as baby's diet changes

We also learned that while a baby is "EBF" (exclusively breast fed) it will process the milk much more effectively than it can solids or formula, so the poo will be cleaner and easier to wash.

The Knaddiplan for diapers

So, right now we're going to go with
1. disposables right away to handle the miconium
2. home-washing after that (we think) at least as long as our kiddo is EBF and that whole breast feeding thing works out
3. maybe switching to disposables again if the cloth aren't lasting through the night or if they are just too messy once we switch off of EBF