Lack of Sleep and Baby Towels

These days, alot of our spare time around the house has been spent setting up the nursery, washing new clothes, blankets and such and getting the house ready for Baby. Why do mommy and daddy have so much of that spare time? That would be because the nights of eight consecutive hours of sleep are a distant memory.

This past weekend was no different. At about 4:45am on Saturday morning I had tossed and turned enough to wake Mike from his peaceful slumber and he finally asks me if I wanted to get up and go watch TV. With that we travel downstairs with pillows and blankets and camp out on the couch to watch early morning infomercials. So romantic! At about 5:30am I begin to ask about breakfast and by 6:00am we were dressed and seated at a new local breakfast joint not far from the house. Yes, we were the first ones there that morning. It proved to be a rather productive day. Mike completed some projects around the house and I cleaned the house. After visiting with some friends that evening, we both crashed at about midnight.
...Sunday...5:00am...Are you awake? Yes, we were both awake and downstairs watching the early Sunday morning televangelists. What's so interesting about this particular morning is that one would think if we woke up THAT early... surely we could make it to Sunday School by 10:00am. But, no.
Check out the converstion that made us late:

Mike: "Sweetie, do you want to go to the store after church and take some baby returns?"
Melissa: "Sure, there is a bag of things right there."
Mike: "We can't take THIS back...it is TOO CUTE!" (speaking of two baby towels)
Melissa: "Mike, honey, we have four baby towels already and we don't even need that many. The baby will out grow them too fast"
Mike: "But Melissa, we need more than 4 towels for the baby."
...and so the conversation went on to receiving blankets, wash rags, crib sheets...until we were sprinting out the door to get to church.

Fortunately, we received some expert advice from Mike's sister who was very helpful on the matter. I want to hear from some other experienced moms.
What item(s) are absolutely necessary for a new baby?
What item(s) are are a waste of money?