My System

As I mentioned, from a purist point of view, I am just a part time cloth diaper user, because for outings and night time diapering, I still use disposables. 
 
On weekends, we use mostly disposables because Richard is more comfortable with disposables.  As for cloth diapers, we started off with 2 dozens of Chinese Prefolds, plus a few Prowraps covers, which we bought from the States (Earthbaby.com).  This set served us well, except that eventually Dominic outgrew the covers and it was not worth the shiping cost to buy just a few covers from the States.  Hence, we had to make do with the China/Taiwan covers available locally.  They were very cheap, compared to the Prowraps but I found them inferior by far. 

When Dominic was older and compared to infancy, he could stay dry longer, I ventured to use AIOs on him.  Most of my AIOs are 2nd hand ones, hence less costly.  The best part is that I could use those smaller Prefolds that Dominic outgrew as inserts for the AIOS, so the prefolds do not outgrow their usefulness! 

My Recommendation

I sort of 'stumbled' into this system of mine and am very happy at the way things worked out.  Hence, I would recommend using prefolds as a start.  The reason being they are less costly than AIOs.  Also, AIOs tend to come in sizes, unless you look for the one-size-fits-most types.  Hence, if you need 2 dozens of AIOs to turn around, you will need to buy 2 dozens of each size to cater to your growing baby and babies do grow very fast, especially in the first few months.  That translates into a lot of money!

Once your baby has outgrown the prefolds, you can proceed to the next size, or venture into more fanciful things like AIOs, and continue to use the smaller prefolds as inserts for the AIOs, to stretch the usefulness of the prefolds. 

Go on and read up on the different types of diaper and diapering system and decide what is your preference.  Have fun with cloth diapers!