Please go read Zadok. And remember – Beliefnet published a piece by him on this very subject. From his most recent post:

That darned McBrien

Now, maybe he’s being quoted out of context, but he reportedly says:

"If there’s no limbo and we’re not going to revert to St. Augustine’s teaching that unbaptized infants go to hell, we’re left with only one option, namely, that everyone is born in the state of grace," said the Rev. Richard McBrien, professor of theology at the University of Notre Dame

*Rolls eyes*
That does not follow. Note the fact that this document gives various theological theories which give a motive for prayerful hope:

The document outlined several ways by which unbaptized babies might be united to Christ:
— A "saving conformity to Christ in his own death" by infants who themselves suffer and die.
— A solidarity with Christ among infant victims of violence, born and unborn, who like the holy innocents killed by King Herod are endangered by the "fear or selfishness of others."
— God may simply give the gift of salvation to unbaptized infants, corresponding to his sacramental gift of salvation to the baptized.

NONE OF THOSE THEORIES IMPLY THAT MAN IS BORN IN A STATE OF GRACE. They all ‘compensate’ in some sense for the lack of baptism and make Christ’s grace available in an extraordinary way analagous to the so-called baptisms of blood and of desire which in other circumstances can ‘compensate’ for the lack of sacramental baptism. The fact that such an extraordinary and compensatory act of God can happen in some cases, is not a universalization of the state of grace.
McBrien allegedly adds:

"Baptism does not exist to wipe away the "stain" of original sin, but to initiate one into the Church," he said in an e-mailed response.

Again, that is at best misleading, and at worst outright Pelagianism. One might just stay within the boundaries of orthodoxy if one says the above sentence with the intention that membership of the Church is the primary purpose of baptism, and the removal of the stain of Original Sin (does McBrien put the word stain in scare-quotes?) is some kind of secondary effect of baptism. However, if it is intended to mean that Baptism is all about initiation into the Church and has nothing to do with Original Sin… well, that position has been condemned as heretical more times than I care to remember.