It sounds like you're describing thrush, a yeast infection of the mouth. Yeast thrives in warm, wet places, and your baby's mouth is an ideal home for it, especially before she grows teeth (the bacteria that grow naturally on teeth help keep the yeast at bay). Although the condition can look icky, it isn't painful and shouldn't interfere with feeding.
To be certain it's thrush, you should see the pediatrician. He'll prescribe an antifungal mouthwash, which you'll administer after feedings, to clear it up. If you're breastfeeding, keep an eye on your breasts, since your baby can pass thrush to your nipples, causing redness, itching, and pain during nursing. To treat it, your doctor can prescribe an antifungal cream to dab on your nipples after breastfeeding. It also helps to stay topless whenever possible while you heal (nothing new for a nursing mom!) so your skin can air out.
The most important thing when dealing with thrush is that both Mom and baby get treated (even if only one of you has symptoms) so you don't keep passing the infection back and forth. You should also sterilize anything that's been in your baby's mouth, like pacifiers, toys, bottle nipples, and spoons, since bacteria can continue to live on these items and re-infect your baby.
Copyright 2003 Meredith Corporation. Updated 2009.