Hello! Good question - here are some thoughts...
Cancer.Org says "When talking about whether or not talcum powder is linked to cancer, it is important to distinguish between talc that contains asbestos and talc that is asbestos-free. Talc that has asbestos is generally accepted as being able to cause cancer if it is inhaled. This type of talc is not used in modern consumer products."
However, it should be noted, there are a number of natural baby powders out there - I produce/sell one of them (it's called "Comfy Bottoms" - http://www.auntks.com/products/comfy-bottoms
). If more consumers voted with their dollars, and put them towards products that are not harmful (to us OR the environment), questions of cancerous baby powders (and yes...the idea is as sickening as it sounds) would not be something we would have to worry about.