I would say it depends on the size of the clothing and the brands as well. If the clothes are larger than, say, a size 4, I would group them into a couple of mix/match type of outfits and sell them that way. If they are smaller, lots seem to do well.
If they are lesser brands (like WalMart, Kmart, Target, Sears, Penneys) then I would definitely sell them in a lot. I (going against my advice here) recently sold a lot of size 6 boy's clothing (26 pieces) and it went for $157.00!! Since everything was not a designer name it did better having a larger group of items.
If you have boutique/designer names or full outfits from a Gymboree or Gap line, I would sell those separate (after checking eBay completed auctions to see what they are going for) and make sure you are selling all the girl's same-sized clothing at the same time.
The one good thing about lots is that is saves on listing fees. I would also recommend some good pictures, even if you are selling it as a lot, so people can see what the individual pieces/outfits look like.
A great resource is the eBay discussion board called "Children's Clothing Boutique", they really have some great info there!