for parents, godparents and guests, wear whatever is appropriate for church. modesty being key, and you may have to remind some family members who have lost touch with that concept.
for the baby,find out if he will be baptized by immersion or by pouring, or if you have a choice, these questions should have been covered in your parent classes. If by immersion, just a onesie and diaper, which are removed (wouldn’t be my choice but I’m just the grandma) just prior to the dunking, and have a big towel ready. then he is taken to another room to be changed, into something white is traditional, and a sign of the sacrament, but it does not have to be an expensive suit or gown. In any case he will probably be given a symbolic white garment resembling a bib.
if by pouring, wear what is traditional in your culture, since often the godparents buy the outfit, let them go for it.