What works best for a newborn?
Many moms who I have talked to say the exact same thing about their newborn diapers. Prefolds or fitteds with covers are the best way to go. Prefolds are inexpensive, the preemie size works well for a newborn and can be used as doublers later on. Since you are changing a newborn so often, this is very cost effective. Very soon baby will need Infant size prefolds too. But prefolds don't always hold NB poop in, so that is why fitteds are another great choice. Some favorites are Kissaluvs size 0 (some find them not absorbent enough, others love them), Swaddlebees, and many WAHM brands of fitteds. Some favorite covers are Proraps, Bummis Super Whisper Wraps, and Thirsties.
It seems that most babies do not do well in the newborn stage with AIO diapers. They don't hold poop in well, or they wick too fast.
Our Experience:
Our personal favorites were Kissaluvs size 0, Mama Bird fitteds (a free sewing pattern), and Bummis Super Whisper Wraps, along with envelope and pocket diapers once baby is big enough for smalls. Even though my second baby was over 9 lbs at birth and grew very fast, the Kissaluvs size 0 fit until baby was almost 6 months! My third baby was one ounce less than my second, and Kissaluvs size 0 only fit until about 3 months. So every baby is different, what works for one may not work for another. AIOs did not work well at all, most thatI tried leaked or wicked for all my children in the NB stage. There is one AIO that did work though, the free Mama Bird pattern. I did try prefolds, and they worked well, but I found fitteds were easier for everyone in the family to use.