Pouch Slings:  Babywearing with the Cradle Hold
Most newborns seem a bit shell-shocked by all the stimuli bombarding them in the new world outside Mom's body.  Because a sling simulates the warmth and shelter of the womb, babywearing is a very sensible and effective way to ease a baby's transition from womb to world.  Because a sling also makes it easier to hold a baby for longer period of time, babywearing is a handy way to ease a parent's transition from a relatively simple world before the baby to a world that is nothing but the baby.
If you tuck a newborn into a sling and take a short stroll, the baby will be soothed by the rhythm of your walk, hear your heartbeat, and feel safely enclosed in the warm, dark pocket.  If the baby has an upset tummy or is restless, take a longer walk:  it's a great way to tame frayed parental nerves, most babies won't be able to resist the urge to sleep, and the change of environment often is refreshing for both.
Another big plus is that a sling provides a good line of defence against grabby people (curious toddlers, strangers at a store, over-zealous relatives at busy holidays, the well-intentioned neighbor with a head cold, etc.) when you and the baby need a break.  Who would want to bother a sleeping or peaceful newborn nestled in a sling?
 

Some babies never do care much for the coziness of the cradlehold and quickly move to the front carry positions; however, super-cuddly babies can hang out in the cradlehold position for many months and be happy as clams
.
1.  Put your sling on, shoulder fabric cupping your shoulder, middle of pocket lined up between your navel and hip. Pick up your baby.
2.  Get a good but gentle grip on your child's legs & back, supporting the neck of very young babies, and hold the child against your shoulder above the sling's pocket. 
3.  Place your baby's body in the pocket of the sling, bottom first, so that the baby is resting on his or her back, pulling the fabric around the baby so that the pocket encloses the baby's body.  The baby's head will be towards your shoulder and must be higher than the baby's bottom
4. Hold the sling and baby with one arm and scoot the baby and sling so that the baby's bottom rests between your navel and hip. The baby's bottom must be firmly seated in the sling and there should be enough fabric between you and the baby that the sling "cups" the baby.  If a pouch sling feels too loose, try giving the shoulder fabric a twist.  If this doesn't tighten it up sufficiently, then the sling is too large and not safe. 
5.  A note about newborns:  If the infant is quite small and seems lost in the sling, place a folded receiving blanket or towel under the baby's body for extra support and to fill out the space in the sling.  Itty-bitty babies should be at a diagonal with the floor (as compared to resting flat in the sling, parallel to the floor.)The baby should breathe clearly and smoothly, with no sign of obstruction to the airways; you want to have at least a finger's width of wiggle space between the baby's chin and chest. 
Leah's thoughts on this postion:
Roll-over each image to get another look.
Copyright 2006:  Sweet Things Baby Slings, LLC.