Advisor's wife is having a baby, should we be getting him something?

A personal gift from you, as an individual student, is not expected, at least by European or North-American etiquette. It may be nice to pool with other students and group members to offer a small gift (either something for the baby, or something for the father). It'd be more customary to offer it after the baby is born, rather than now.

On the other hand, there is no strong expectation that you offer a gift. I.e., if you decide not to for any reason, he won't think it weird.

I completely agree with @F'x's assessment: no gift is necessary really. Having said that, if there's something you can do that's simple and doesn't strain your budget, then as a courtesy (from a colleague to another) that might be welcome.

Having been in this situation myself (from the advisor's side) I can say that one thing parents of a new child lack that grad students might have more of is time. If it's possible, lab folk could offer to help running meetings without the advisor, do guest lectures in classes if it's appropriate, and so on. Again I emphasize that it's not necessary at all, but it's a gift that would not cost you money, and would be greatly appreciated by someone who probably isn't sleeping very much :)

This is the same answer I gave about weddings but it holds for births also.

You must do something. Building social relationships with your work collegagues is really important. If other students are organizing the collection and suggesting an amount, I would give that much. If they are organizing the collection, but not suggesting an amount, I would chip in two beers worth of cash. In some cultures two beers will be on the generous side, while in other cultures it will be on the cheap side. It won't be out of place in any culture. If no one is organizing the collection and you want to take charge, then I would suggest asking people to chip in one beer worth of money (all students should be able to afford this). If no one is organizing a collection and you don't want to take charge, go out and buy a card and get the other students to sign it.