The one study that does give cloth diapers a leg up in health benefits for baby boys appeared in the October 2000 issue of the Disease in Childhood medical journal. In that article,
Disposable plastic-lined nappies have a long line of problems.
The study
German researchers measured the scrotal skin temperature in 48 healthy children aged 0–55 months (three age groups) for two 24 hour periods in randomised order (either cotton or disposable plastic lined nappies) using a portable, miniature recorder.
They found that the scrotal skin temperatures of baby boys were significantly higher when they wore disposable diapers than when they wore cloth.
They highlighted how the usual physiological testicular cooling mechanism is blunted and often completely abolished during plastic nappy use. Your baby’s bits are not able to regulate itself in a hot plastic nappy.
Higher scrotal temperatures, lower sperm counts
They suggest that prolonged use of disposable diapers as infants was an "important factor" contributing to the decline of sperm production among adult males. To make healthy sperm, you need a good environment for the sperm-producing parts of the body; that is, scrotal hypothermia is an important factor for normal spermatogenesis.
“Male reproductive health has deteriorated in recent decades. (…) increased testicular temperature in early childhood, due to the use of modern disposable plastic lined nappies (diapers), could be an important factor contributing to this decline.”
The interesting thing is that Proctor & Gamble conducted its own study and also found that scrotal skin temperatures increased for boys in disposable diapers.