Nowadays it doesn't really matter what you put on the cradle. I would avoid using oils and anything that has a strong aroma. Most paints and varnishes can be used with confidence that they will not be harmful to the baby housed within.
If you want to preserve the look of the timber and have a 100% safe finish I would recommend white shellac. Most sections can be finished prior to assembly, just use a bit of masking tape over areas that are to be glued so as to preserve timber to timber contact for the joint.
My personal preferance for a finish on a cradle would be to paint it with a neutral pastel colour or colours to give it a softer more subtle look. Show off the baby not the woodwork.
Hope this is of some help.
Cheers - Neil :)
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One night a wife saw her husband standing over the baby's crib.
She stood watching him silently, he looked down with mixed emotions, disbelief, doubt, delight, amazement, enchantment, and scepticism.
She slipped her arm around him, "Penny for your thoughts?" she whispered
"It's amazing. How can they possibly make a crib like that for only $49.99?" <O:p</O:p
Contributed by: Shane Watson of Qld.