Interesting comments from a pediatrician about using dryer sheets. http://www.drreddy.com/eczema.html
Among the things mentioned are: if you have a child who has rashes not only is it harmful to use dryer sheets for his/her clothes, but your clothes, as well.
"Babies are especially sensitive to chemical irritants, and sometimes even the slight residue from detergents and fabric softeners will lead to irritation. Dryer-sheet softeners are especially notorious in this regard; even if you are not using them on the baby's clothes, if you use dryer sheets on your own clothes the sheets leave a residue on the inside of the dryer which then comes off on the baby's wash in the next load (the residue can persist for several loads after the sheets are used, as a matter of fact). The solution is to avoid all potential irritants; this means that you may not be able to use dryer sheets for any laundry in your dryer."
From Berekely Parents Network:
"One more point about fabric softeners that wasn't made by responders so far--the allergy doctor at Kaiser who treats my toddler for excema pointed that IF I choose to use a fabric softener, it should be the kind I put in the washing machine, not the sheets one adds to the clothes in the dryer, which work by coating the clothes (with a wax, I think) and is definitely going to contact the skin, even if it is scent-free. The fabric softener in the washer is less likely to be right on the surface of the cloth in contact with skin--it either penetrates into the fibers or is rinsed out or both--can't remember that part of the explanation."