Interesting discussion. I don't think the issue of "evil babies" is especially relevant. Saint Augustine specifically mentions that babies are tainted by evil - remember "original sin"? You could argue that from a Christian perspective, human babies should ping as slightly evil (selfish). Would a Paladin kill them? Certainly Christianity has forbidden infanticide since day one.
The question isn't whether something is evil, the question is whether it is a proximate threat. An evil (selfish) peasant or an evil (lustful) prince don't get murdered by the Paladin when he walks past them. Racial alignment and predisposition to evil and the rest of it don't make any difference: if it's coming at you to kill you (or somebody else) then you waste it. If it is harmless, even if that's only because it doesn't have its adult teeth yet, then there's no reason to kill it.
The logic "it will grow up to be evil" doesn't hold, either. Even if that's a true prediction (and there's no way to know) it's ultimately beside the point: "good" doesn't mean wiping out evil, it means doing what is decent in any given situation. If a Paladin's job was to kill everything capable of doing evil he'd have to blow up the planet.
The whole Paladin as "baby killer" issue really just supports one conclusion: "evil" is a red herring on the issue of whether to kill. You kill things that are threatening you or someone else with violence. You don't kill anything else.