Thank you so much for all the wonderful ideas! There are a lot of game ideas that sound fun so we're going to play them definitely!
Our friends chipped in to buy a stroller/car seat combo but we will all still bring in our smaller gifts, like diapers, onesies, etc.
For favors, I bought these plastic baby bottles from the dollar store and I can put some candies in them and then tie a nice pink ribbon and a tag thanking guests for coming.
For another token, I am making this movie on a DVD that's kinda like Kids Say the Darndest Things. All our friends' kids are 7 and younger so I made a list of questions like "How long does the baby stay inside mom's tummy?" or "What is a good age to have a baby" or "Who's the boss in your house - mommy or daddy?" will really generate some funny responses from the kids. I asked my daughter the first question and her answer was that the baby stays inside mom's tummy for 5 years LOL! Then at the end, we ask the kids what their advice is to the mom-to-be and it's both so heartwarming and funny to hear what they have to say. My daughter's advice was "always wash the baby except thursdays because it's still clean then" and "make sure it goes to bed on time". I didn't bother asking the adults what their advice was because this is baby #2 for my friend and I am almost sure we will get the usual types of advice for moms... So doing it with the kids is really fun this time around... I really made the movie nice - you don't hear the parents asking the question - you see the scene title and read it and there's some nice scene transitions so it's not boring.
Thanks again everyone for all your help!