When we were in Seattle, we did find a day care that used cloth diapers on the kids, so it’s not unheard of, but in general I think most day care centers do require disposables. You’re in SF, though, so look around.
I’ve used cloth diapers with all 3 of my kids now. I started with just plain prefolds and Velcro-closing wrap covers, which worked perfectly well, really. With my second baby, I got a little more fancy and bought some all-in-ones and pocket diapers. The pocket diapers worked really well, and with my third baby, that’s primarily what I used. My brand of choice was Fuzzi Bunz, because I prefer snaps to Velcro. First of all, the Velcro is a pain in the washing machine (you have to fold the Velcro tabs down before washing if you don’t want all the diapers to link up and form a giant diaper chain in there) and second, once the child gets to a certain age, he can undo the Velcro very easily, but the snaps are a bit more difficult. All of mine have had a “let’s strip the diaper off and run around naked” phase, so I like the snaps.
The nice thing about pocket diapers also is that you can vary the absorbency based on what you stuff the pocket with. You can go with just a simple microfiber insert for regular use, or use a prefold + insert for overnight, or whatever.
We just used a Rubbermaid trash can with a lid for our diaper pail. When they’re still breastfed only, you can just throw the whole diaper in there without rinsing. Once they’re on solid foods, you need to rinse the “solids” (my preferred euphemism around the squeamish) before tossing the diaper in the pail. For outings, we have either used disposables, or packed some pre-stuffed pocket diapers with us, and plastic bags for sealing up the used cloth diaper and tucking into the “wet bag” that came with our diaper bag.
Some cloth diapering people are really fanatical about never letting a disposable diaper touch their baby’s skin or whatever, but it doesn’t have to be an either/or thing. We’ve always kept some disposables around for using when I let the diaper laundry go a bit too long and ran out of cloth diapers, or for long car trips, or whatever. Although you can very easily use all cloth and never disposables, too. It’s all a matter of personal preference.
Oh, and we did use a diaper service for the first four months we had a baby. It was actually quite nice, but we ultimately discontinued it because it was cheaper to do it ourselves. It’s a nice alternative if you don’t mind the price, though.