There are several kinds of catagories.
1. Infections
Bacterial like Strep and Staph
Fungal like yeast (Monillia)

See: Dr.Sears
http://www.askdrsears.com/html/8/T081400.asp
2. Vitamin & Mineral deficiencies
Zinc deficiency
3. Allergic reactions
Contact allergy to diapers or diaper
wipes
4. Prolong wetness
Not changing the diapers soon enough
The infections with Monillia is recognized by the solid redness with satelite
bumps around it. This is cleared up quickly with anti yeast creams.
You can use the vaginal yeast creams like Monostat 7, or call the doctor for a
prescription. Staph bacteria causes only red bumps with some having a
white head on them. Treat this with antibacterial soaps (lever 2000) and
antibiotic cream.
Also Strep can infect the skin around the anus and cause
a very tender anus with redness around it. This is more frequently in 1-3 year
olds and can be treated with oral antibiotics. It will not clear up with
creams.
Strep infection
Zinc deficiency called Acrodermatitis Enteropathica can cause a rash around
the mouth and diaper area. It does not go away with creams and is treated
by giving zinc. But this should be rare since zinc is in the formula,
breast milk and we recommend vitamins with zinc after 1 year old.
The most common cause of rash is a reaction to diapers or diaper wipes. The best thing to
clean them up with is water and paper. Try changing diapers or stopping
the wipes for awhile and see if it clears.
The other cause is prolong wetness. But it is impossible to catch them
right after wetting their diaper. So clean them with water and paper and
put Vasceline or A&D Ointment on them after every diaper change. If they get
a rash, then put diaper rash ointments on them. They frequently get rashes
with diarrhea so keep them greased up good with diarrhea. If they get a
rash from diarrhea, the best cream is Dr. Smith's Ointment. Or if you are
daring, try air drying the rash. (I tried that with my child with disastrous
results. What a mess.)
Dr. Knapp