The url really doesn't matter. The name does, and it's great.
My advice would be to use the proper spelling ('Babylist') in general - especially in your html titles - and in no time you'll be #1 for the term, regardless of spelling:
"People" will Google "babylist". Remember that the vast majority of the people using the web have no idea what a browser is, much less a URL. Even when they have a URL, that ubiquitous google box is the place it gets put.
1. there's caution, and then there's 'thinking small'
2. the owner of the domain is a single-location brick and mortar retailer, with no e-commerce. that would inform my thought process, were in in the OP's shoes
Thanks. That's how I'm doing all the branding on the site now. I'm not appearing in google yet, but I'm paying for ads with one of their $100 off coupons.
My advice would be to use the proper spelling ('Babylist') in general - especially in your html titles - and in no time you'll be #1 for the term, regardless of spelling:
http://bit.ly/h5fizW