PP - I got some cheap (ish) longies off ebay for around $27.99 a pair, and they work great. I gave them a wash and lanolised them, and had them on him last night. The nappy underneath was pretty wet (we left it on for the morning flood, and a surprise poo!) but the longies were fine. They just sorta repel the pee I think from leeching into other clothes above the nappy (is that the right words I'm looking for?)
The reason the other word for the lanolised knitted covers is SOAKER, is because these items SOAK UP urine.

(you might see items for sale described as "wool soaker")

So, after the fitted night nappy has absorbed as much as it's going to (is at maximum absorbency, feels damp to the touch), then the wool of the longies takes over, soaking up urine (well it does if you have lanolised the woollies AND the cover/longies is 100% covering the nappy, including the back, EVERY skerrick of the fitted night nappy needs to be covered for this to work).

that's my amateur description, it's much better explained at nappycino forum, at the WHY WOOL link.

the clothes ABOVE a night nappy will WICK if you tuck singlets, pj tops etc INTO the night nappy.

wicking is like this
imagine a bucket of water
you put 20cm end of a bath towel in the bucket, only the immersed bit is wet
come back in 30 mins, whole towel is wet, even though only 20cm is IN the water - this is WICKING

hth