The liner does two things. It allows urine to pass through, but as it is non absorbent, it cannot return, thus keeping baby's bottom a bit drier. Also, it catches any poo, and the whole thing is then easy to drop into the toilet for flushing. While a baby is breastfed and before it is weaned, any poo will not normally smell offensive but, equally, it will be very runny.
The best liners for preweaned babies are the Bambinex liners or Ultra liners. These are lovely thick liners so catch more of the liquid poo. If little one has a very explosive bottom the liner may well not catch all of this, although if you have a good nappy and wrap you should not get staining onto clothes. Even if you do get leaks, bear in mind that disposables often leak runny poo at this age as well. Once your baby is weaned, the liner will be much more effective at catching all the poo. In the meantime, if you have chosen your nappy well, this should catch most of it, so you may just have to rinse your nappies quite a lot in the early days.
Many people continue to use Bambinex and Ultra liners all the way through their nappy time. If you find you need a wider liner try the Supersoft Mioliners as they are wider but also slightly stretchy so can be shaped to fit the nappy.
Disposable liners biodegrade slower than toilet roll so if you have any concerns over your drains or just want to avoid problems you should not flush liners. Wet only liners can go into your compost bit if you have one or even your paper recycling bin (WET ONLY!!!) This will dramatically cut how many liners potentially go down the drain if you choose to flush. Please refer to the packaging of your liners to see if they are recommended for flushing or not, most do not recommend flushing. Personally I was a liner flusher when I used disposable liners and took the risk but officially we do not recommend flushing them.
You will find good quality disposable liners are very strong, and do not tear or split, however wet or full they are. However, if your main reason for using real nappies is the cost, then you might want to look at washable liners, to save on the (approx) £5 a month cost of disposable ones.
Washable liners come in a number of materials: fleece, cotton, polyester and silk being the most common. I am a big fan of fleece liners. There is no right or wrong way up with either a fleece or a paper liner. However, the polyester ones are often slightly "furry" on one side, and this goes face down into the nappy to stop the liner sliding around; on the other side, they are shiny and non absorbent, which goes face up and so is an effective stay dry layer.
Undoubtedly, however, a squidgy poo is slightly more of a pain to deal with if you have washable rather than disposable liners, but that is only so if the disposable liner in fact caught all of the poo.
Washable liners do keep baby amazingly dry, and are a very good idea if your baby is subject to repeated rashing (assuming you have ruled out other causes of this). (Raw) Silk is the most gentle of these fibres, and is particularly suitable for babies who suffer from eczema. However, it does have a bit of a funny smell when wet, which some people do not like, and others do not even notice.
Once your baby gets to the wriggly stage, if you find the liner is moving try the following to counter this. When you have fastened the nappy - feel inside to straighten out the liner as much as possible before putting on the cover. Very often, it shifts as part of the process of being put on, rather than through later wriggling - but once it is no longer in place, wriggling will make its position worse.