General Photography Tips
Make sure baby has been fed and had a nap before attempting a photo shoot. Check baby's face for bits of food, spit up, etc. Set up a mini studio using a blanket or inexpensive fabric. A simple prop is to place a blanket or fabric over some pillows to help prop baby up. Set up your "studio" near a window or outside if weather permits. Get down at their level and don't forget to capture their tiny feet and hands! See below for more specific ideas.

Camera Settings
Set your digital camera to the highest image or pixel resolution (300 dpi or 1200x1600 pixels or greater is best). Turn off your flash, using a flash is not as flattering as natural light and can create shadows, see lighting for tips for more info. Make sure the date stamp is turned off, battery fully charged, and you have plenty of memory. 

Background
Place your baby on a plain background such as black or white blanket or buy a yard or two of inexpensive fabric. Patterned backgrounds create a distracting photo and take the focus away from the baby. Make sure when you look through the camera lens you only see the baby and not chairs, toys, etc... When including others in the photo, try to keep their faces close together. Try different positions to get the right angle. Take lots of photos- babies are squirmy- it takes several tries to snap just the right one.

Lighting
Natural lighting works best for portraits. Set up your "studio" near a window or outside in a shaded spot. If this is not an option try moving a few lamps near baby, you want to get as much light as possible and try to avoid using the flash. Red-eye can be corrected, but it's not the same as seeing the beautiful color of your baby's eyes.

Poses
Look through baby magazines, calendars, photography studios, etc. for ideas on adorable baby poses. You can re-create many of these in your home "studio" using simple pillows and blankets as props.