there was a thread on this i saw not so long ago.. i cant find it now tho.. (obviously in a preggy thread somewhere)
anyways from memory of the thread some people said they just continued using the normal washing powder/liquid. some suggested biozet? was a good one. It really depends on the bub whether they do break out.. some babies dont and some babies do have sensitive skin.
i have heard that lux soap flakes need to be dissolved in hot water, i have a sample packet of lux soap flakes from the coles baby club sample bag (which also came with a 'normal' fabric softner cuddly) ok just came back with my lux sample. (ive also heard that using lux soap flakes with cloth nappies didnt help with the absorbancy) it says its suitable for top loader washing machines only. im guessing it would stuff up your washing machine if you used to much or didnt dissolve it, afterall the ingrediants list 1) soap 2) fragrance. lol!
i imagine anything thats fully biodegradable would be fine to use on the bub, so possibly that earth choice? could be used, i know its cheap... and amolin seems never to be on special these days..
ive heard that fabric softner is bad for bub clothes that have fire resistance/retardent.. and that some people use white vinegar instead.

for DD i used amolin and normal stuff for our clothes.. no problems (i mean think about, people who will visit and want to hold your bub arent going to wash their clothes in sensitive washing stuff).
I did soak some of her leaky nappy stained suits in nappysand (but not for long, something about nappysand and metal buttons from memory) and then would put them in the wash and use amolin... at the very least it made her clothes smell nicer than the nappysand.