I've been trying to "save" on water heating, and started doing almost all of
our laundry in cold water a couple of weeks ago. Since then, with no other
real "changes", my daughter has started getting what seems to be a contact
rash where her clothing touches her body. Is it possible that the warm
water is helping to better dilute the detergent (even though we have always
rinsed with cold)? I mean I can see how it would be "possible", but it just
seems so weird to me.

Dominique had this happen to her when she was just months old when we were
visiting my mother in California. My mother had a hair salon and washed all
of her towels at home, and used a somewhat harsher detergent than we used,
and Dominique broke out like crazy after we washed her clothing there. But
no other incidents for 17 years <g>. Til now - and she's getting these
rashes every 2 to 3 days.