This one's for Ali. Feel free to add what you find to be essential in the comments!
I'll try to group them in a logical fashion:
Bath: Safer bather (or bathtub insert thingie), wash cloths, towels (really soft ones, go for all cotton), organic/natural cleansers and lotions (Burt's Bees, etc.), a little tiny scrubber brush to handle "cradle cap". They may give you one at the hospital, if not, look for something that looks like it was meant to remove corn silk from corn - very very soft bristle brush.
Illness: nose suckers/bulbs (yucky but necessary), drops for gas, baby pain killer for fevers/illnesses. You may never need them, but better to have them on hand than not. Baby diaper ointment - we liked Weleda. Q-tips for umbilical cord care. Thermometer - we never could get a proper reading from the ear thermometer, so we went with a regular digital and used it under her arm. Tiny nail clippers, if you don't want to tear them off manually.
Bedroom: cotton fitted sheets - several sets for diaper "blowouts" or illness (4 or so. How often you do laundry determines the number needed.), a mattress wrap if you're paranoid like me, water proof mattress pads (2) also for "blowouts". If you have a baby that likes to be bundled you'll need a few receiving blankets (4-6). Receiving blankets are also great as burp cloths. A crib set is fine if you're going for a theme, if not, no biggie. Crib bumpers are good until the kid starts ripping them down. A good crib with sides you can lift up or set down with one hand. Important! You won't have two to do this with. A good brightly colored, multi-dimensional movement, musical mobile. Useful for distracting grumpy babies.
Diapers and wipes: choose whichever type you like best - cloth or disposable. The jury is still out as to the long term environmental impact of one over the other (Professional cleaning = water + chemicals + drive time to and from your house. Disposables = sitting around in a landfill.). Cloth may be best if you are doing all the laundering on your own, but as an exhausted parent, the concept of having to wash messy diapers was too much for us. We had a service for a pair of months and then turned to disposables. I'm hoping that my eco-karma out weighs our share of diapers. The size you will need may change quickly - will you need newborn or the next size up at birth? all depends on how big Little You is.
Changing station: You don't need a dedicated changing table. That's a waste of money (to me). Instead, get a good dresser that is at a good height for you and your honey to change the baby on and get a changing pad and affix it to the top. Then you'll need about 2-3 changing pad covers. All cotton and soft is best. If you have something on the ceiling or the wall over hanging your changing spot, Little You will be less frustrating to change. This way, as your kid gets bigger, it's just his dresser and you don't need to buy an extra piece of furniture.
Diaper disposal: The "need" for a diaper genie is a toss up. You waste a LOT of plastic "sealing" each diaper in. The alternative is just a regular trashcan and toss diapers on a frequent basis to keep the smell down. In case no one has told you, breastfed babies poop really has very little smell to it, unlike formula. Once they go on solids, phew!
Diaper bag: Get one with a changing pad, pockets and zippered plastic bag for soaked clothes that neither you nor your husband will feel humiliated carrying around. We liked the one we got from Land's End, 6 years ago.
Seating: A rocker/glider to soothe/nurse/play. A foot rest is good, too. A small table next to it to hold snacks and liquids for you. Space for a phone, maybe even a book or the TV remote once you get the hang of one handed nursing/bottle feeding, is ideal.
Lighting: A night light or dimmer switch on your main room light. You will need to see to put the baby into the crib or get him for a night feeding, but you don't want to turn all of the lights on.
Clothing: Again, size is dependent on birth weight. Style is dependent on time of year. You won't go wrong with 0-3 month sizes, but he may "swim" in them for a bit if he's little at birth. Or grow out of them instantly if he's huge at birth like Oliver (0-3mo = up to 11lbs). Onesies are your friend, as are baby sleep sacks. Anything that lets you get to the diapering area ASAP is a good thing. Anything that needs special cleaning: forget it! Cotton. Cotton, cotton, cotton. Nothing with too many snaps, buttons take too much time, velcro can be either scratchy or startlingly loud to small fry. Depending on the weather when he's born, you may want a snowsuit. Generally babies take lots of layers rather than heavier clothes.
Little tiny mitten thingies to keep him from scratching his face off after birth. Or else socks, but they keep falling off. Trust me on this. Caitlin shredded her face the day she was born with her tiny fingernails after they air dried and hardened.
Car seat/baby carrier. Required by law before you can leave the hospital. Now is not the time to go cheap, either, as your baby will live in this for months. We did our research with Consumer Reports before purchasing ours. By the way, whatever outfit you take him home from the hospital in needs to have legs so that he gets strapped into the car seat/carrier safely.
Baby containment devices: all optional, but some have been life-savers for us. Vibrating bouncy chair, swing (when they're a little older 2-3 months?), immobile exer-saucer (3-4 months), Boppy pillow, sling to carry on your chest (tons of options here from giant pieces of cloth to Baby Bjorns - test drive some in the store with a stuffed animal), carriage or carriage frame that you snap your carrier into (very light weight), portable play pen "pack 'n' play" for traveling crib action (can also wait, not an immediate need). I've heard good things about the Baby Bumbo chair, but again that's for after the baby has head control and before they can sit up on their own (3 mo?). Much later on, a good high chair. We liked the Chicco Mamma which was expensive but excellent. They last, too. Val got a pair for her twins and is loaning one to me, so they're pretty tough.
If you're planning on breastfeeding: you will need washable breast-pads to stop leaking all over the place. Disposables don't breathe well enough, I found. Nursing bras you can undo with one hand, no underwire, very comfy. Lanolin for chapped nipples. Clothing that lets you access your breasts ASAP. A sleep bra (or 2) that you can also pop pads into. Trust me, you'll leak in your sleep and wake up in a puddle. Le sigh. Ask me how I know that.
Toys and books: Optional. Your baby won't care about much other than nursing for a few months. However, soft is best with black, white and red being colors/contrasts newborns see best. Keep an eye out for recall listed items. Don't let anyone give you anything that makes too much noise. You'll want to kill it after its song/noise plays for the nth time! Remember that whatever the toy is, eventually it will wind up in your son's mouth, so caveat emptor!
If it seems like a lot of stuff, it is. You can break it down to the short list of must haves, leaving out lots of baby containment devices, but you must have a video camera. You'll be amazed at how fast they change and how much you will forget, just from month to month.
Anyone else have anything to add? Toss in your 2 cents in the comments.
Disclaimer: I kept referring to he since that's what Ali is having. So if you are having a girl, don't feel left out that I didn't switch sexes and refer to she.