John the baptists’ baptism was, we are told, “a baptism of repentance for the forgiveness of sins” (Mark 1:4). Baptism was not an uncommon practice among religious movements of the day, and John’s followers would’ve been familiar with the practice. John’s baptism of repentance was a paving of the way for Jesus’ coming, life, resurrection, etc. Baptism performed after the resurrection therefore has a different content–not a baptism (merely) of repentance, but something more. It’s how you define that something more that becomes interesting. That definition is complicated by numerous verses in the New Testament which seem to associate baptism with several different things: Being ‘buried’ with Christ that we may receive new life (Colossians 2:12); an association with faith (Colossians 2:12); salvation and cleansing of conscience (1 Peter 3:21); belief plus baptism equals salvation (Mark 16:16); repentance plus baptism equals forgiveness of sin AND receiving of Holy Spirit (Acts 2:38); baptism as the appropriate method of acceptance of the heard message of the gospel (Acts 2:41); belief associated with baptism (Acts Ch. 8, Acts 18:8; Acts 19:15); being baptized in Jesus’ name (Acts 10:48); baptism into Christ’s death (Romans 6:3); baptism by one Spirit into one body–unity (1 Cor 12:13). Any one verse could be used to describe baptism, to suggest that it is a signal of belief OR faith OR repentance OR the Holy Spirit OR reception into the Church. I prefer to think that baptism is a multifaceted ritual/symbol with a wealth of meanings. It bears multiple interpretations, and thus carries a deep and rich significance for believers.

Because of the nature of baptism, it is helpful to think of it not as a human act, choice, or right, but as a gift from God. When we quibble over it’s meanings, we must remember we quibble over something we did not create, and can never merit. It is only by God’s grace to us that we are permitted the opportunity to receive baptism, by water and the Spirit.

So, to answer your questions, while some groups separate water and Spirit baptism, I think this is an unnecessary and artificial separation: By virtue of Christ’s death, being baptized in him name means we are baptized as a gift of the Spirit’s grace, and the Spirit is God’s continuing presence with us.

But I do not believe we should consider baptism a magical ritual in which the Spirit is automatically given, or without which the Spirit can never be had. Consider the interesting case of Acts 10:47-Peter is meeting with a group of GENTILES and it is apparent to him that they have already received the Holy Spirit, so he has them baptized with water. Baptism is a gift to us–not a thing we control. The Spirit is also a gift. God gives them as he will.

Consider also the interesting case of Jesus. First, he baptized no one (that scripture has recorded) with water, although we believe his Spirit is present in baptisms by water. Second, he himself was baptized. For what purpose? Some suggest that he was setting an example of humility, which is not something Protestants talk a great deal about. We ought to understand baptism as well as possible and then be humble/obedient to it. Catholics would take the humility/obedience thing so far as to say we ought to be obedient to church leaders. I think we can learn something from them. Baptism is not merely a ‘memorial’ act–an act that memorializes the day we believed in front of others–but is more significant. It is a symbol of belief, repentance, etc.–all the things listed above–and is also a gift we receive when we humble ourselves, to God, each other, and church leaders.

Ok so far. Now as far as how we ought to define baptism and who ought to utilize it: There is a great deal of disagreement. Infants cannot of course intellectually consent to anything, but are often baptized in communities which have a more communal, less individualistic, understanding of faith: This is also technically a much better Hebrew understanding of ‘people of God.’ So, cultures which are generally more communal baptize infants, because it is understood that a child’s faith has a great deal to do with the faith of it’s parents/family/community and is fundamentally a gift from God which he withholds from none (See the story of Cornelius and others in which whole households are baptized. If I recall correctly, this would generally also include servants, and all would receive baptism on the strength of the paternal leader’s decision). In cultures that are more individualistic and more rationalistic (mine and that of later Reformers), adults tend to be baptized because intellectual consent before God is understood to be paramount, and this does square nicely with objective New Testament evidence: We have no record of infants being baptized in scripture.

OK. Time to be finishing. Infant baptism, bad? No. Just not optimal, scripturally/theologically speaking. Even worse is the conflict which has led some groups (see the Quakers) to forgo the practice altogether. In discussing this question, I pray we never forget that we are arguing not about our own possession or invention, but something we all freely received while unworthy, while still dead, and still in sin. None of us, infant or adult, were mature, smart, or sentient enough to merit our baptism, so let us discuss humbly and with fear and trembling this awesome gift of God.

And http://en.wikipedia.org/wiki/Covenant_%28biblical%29 as a nice overview of the covenants.