Hi K.,
I just started using prefolds with my newborn so I can answer all your questions pretty well.
Currently I have 24 prefolds and 5 covers and have to do laundry every other day.
You need to either boil the prefolds for 45 minutes or wash them at least 3 times prior to the fist use. Cotton has a film on it that prevents water absorption, you must get rid of the film in order for the prefold to absorb urine. I chose to boil since it reduced the amount of water used. You will know if you have boiled/washed them enough if water soaks into the prefold and doesn't bead off. You need to use specific detergent with cloth diapers and no dryer sheets, dryer balls are used instead (got mine at Bed, Bath, and Beyond). You can research online the detergents that are okay, I use Charlie's.
Covers get thrown in the wash as well but I let mine air dry. I put my dirty diapers and covers a in bag that is in a pail. I got all my items at Be By Baby but you can buy them online as well. I just take the bag to the wash, throw in all the dirty diapers and the bag as well. You will also need a wet bag for your diaper bag. In terms of folding prefolds you can research that online as well. I use the newspaper fold with the snappis.
Some advice:
It is hard in the beginning because your newborn goes potty so often.
You need to change baby often since prefolds don't keep moisture off the body as well as a disposable diaper.
I use about 2 covers a day. When I remove the cover from baby it is always damp with urine. I lay that one out to dry and use another one. Just because it has urine on it doesn't mean you throw it in the wet bag, just let it air dry and use again. Of course if it is poopy I rinse it and throw it in the wet bag.
You may also want to look into getting a hose attachment for the toilet to rinse off the diapers prior to putting them into the wet bag.
Well good luck. It is tough to do in the beginning but give yourself at least 3 weeks to see if you want to do it. I wouldn't stop before then because it does get easier with time. Let me know if you have more questions, I am only 4 weeks into doing this as well so I can help you out.