My DS2 has just had a baby and as it's their 2nd and they live in a tiny flat, and DiL's family pass everything round, all they will be needing is nappies, so they will be getting a voucher.
Apart from money or vouchers, books would be the perfect present, and, as the child is not your own family (so you can't really open a savings account for them), a Boots voucher will be most appreciated.
If giving books, don't forget to write a dedication in the front. (Why don't people do that any more?)