Where do you stand ?
Up to your neck in the brown stuff
Doing the odd one for friends or family wont matter but stick your head above the line and start selling copyright imagery on your clothes and you are likely to be hit with a cease and desist order, especially Disney characters as they are anal about protecting their copyright.
Setting up sounds a lot harder than it is - however I would be careful on baby clothes and ensure you are abiding by any regulations of compliance and make sure you have product liability insurance
BTW I cant seem to get you link to work
i thought as much but thought id double check. ill admit ive sold a few on my page but not loads........ i've been researching the rhinestones etc and rhinestone transfers and ive found alot of sites that are selling the character transfers fro people to put onto garments themselves, im presuming copyright wise this isnt aloud either?? sorry for sounding do thick!! lol Also how do for e.g. market stalls that sell 'disney' character clothing get away with it?? im not saying because they can i can, im just curious.......... i want to do everything prperly so i cant get into any bother as that is the last thing i want. Its a shame really as the characters look really good in rhinestone

Do you know where i can find out about the regulations etc for babywear?
http://www.facebook.com/pages/Baby-Belles-Diamant%C3%A9s/118497288223713 try this link ill try and get it added to the bottom of my profile
thanks again