Something I heard of too when I had my first.
I have a cat..she has been around longer than my kids and is very wary of them. She wouldn't even think of going into their cots and never has attempted too, she has slept under them to get away from a tormenting toddler though .
Funny enough this urban myth is sooo common I remember my FIL and still is, always worried about my little fur ball.
I think your pets need to be aware and familiar with your kids from the time you bring them home otherwise it could cause other behavioural issues with the pets such as jealousy.
My cat (she is a beautiful Rag Doll) is curious and will sit up on the couch arm while I feed but that's the extent of her curiousness, she doesn't go near my youngest when she is on the play gym on the floor.

Not sure if it has every really happend that a cat has smothered a baby??

Good topic though....I am curious to know of other peoples experiences with cats.