Thanks so much for the link Rose_P, I'm printing the site info out for neighbor who's baby has been having a lot of respiratory problems, maybe this is the link as too why the poor thing has been on breathing treatments since he was born 6 months ago.
It hurts to think of a little one suffering needlessly. I hope something helps right away, but I'm pretty sure the doctors would have advised the parents early on to not use fabric softener or scented products of any kind and to double rinse the baby's laundry. I would include the rest of the family's laundry, too because after all, when you hold a baby his face is up against your shirt. The scent isn't the only problem chemical in fabric softener.
Upshot is still: I wouldn't use fabric softener sheets in a quilt, especially a baby quilt.