I love baskets. I own more than is probably sane for anyone person. They are simply the best prop for newborns. They are basic and simple and yet they add so much to a photograph.
In order to photograph a baby in a basket, you need to prop up the baby. I usually use towels. I fold them nicely and then lay the baby on top. If you photographing the baby without clothes, you need to lay them on their stomach, other than that, I usually lay them on their side. You can use another towel behind their back if they roll from their side.
Baskets are perfect for sleeping babies it gives you an opportunity to photograph them while they are snoozing. There aren't too many props you can use with a baby before they can sit up, but baskets give you some versatility with newborns or even the unstable sitter.