Terri, it sounds as if you are doing just fine. As a neonatal and pedi ICU nurse, I can tell you that both back AND side are just fine. And many babies will do ok on their stomachs too, but studies have shown without a doubt that the incidence of Sudden Infant Deaths doubles when babies sleep on their tummies. Actually, what the largest studies showed, is that when there was a big area-wide education for "Back to sleep", that area reduced their incidence of crib deaths by half. As far as covers go, of course it's ok to cover babies! All nurserys do! What the don't want parents to use are heavy, or "puffy" covers like comforters or things with sufficient loft that a baby couldn't keep it's nose clear. Babies are obligate nose breathers. They absolutely can't breathe through their mouths if their noses are obstructed, whether it is from material or from congestion. So, keep on doing exactly what you are doing!