Hi NewMom,
As with anything else to do with children.... there is a lot of contradicting information out there.
Generally speaking, many people prefer the warm mist as it heats the water and will prevent the spread of bacteria, however, it presents a potential burning risk. I am sure most parents can figure out how to prevent their child from coming into direct contact with their humidifier so, that shouldn't be a big problem.
Vaporizers or cool mist generally are less expensive and do not have a tendency to heat up the room.
Provided you change the water nightly and give it a good frequent clean every other day, either should help to soothe her poor little nose.
Hope that helps,
Admin