OK or dangerous?
The AAP recommends against doing it. B/c our parents did it, isn't a good reason to me, we've come a LONG way since then. Dr. Greene and other medical professionals suggest a link between it and obesity:
Babies are born with a wonderful mechanism for knowing how much food they need. During the early months, they take their cues from the volume of what they drink. Adding cereal derails this mechanism. It forces them to take in deceptively large amounts of calories. It teaches them to overeat.
By starting with a spoon, resting between bites, and stopping when your child lets you know he’s full, you will be laying an excellent foundation for good eating habits throughout his life.
A major study looking for the causes of obesity found that short-circuiting young children’s self-regulation of how much they eat is a major cause of later obesity.1 Cereal in the bottle does just that.
Babies that are fed this way may appear to be unaffected – but those few weeks of added convenience may result in a lifetime of struggles with weight. This common practice may have contributed to our being the most obese generation in history.
http://www.drgreene.com/21_861.html
It has been shown to be dangerous with the possibility of getting into a baby's lungs and cause pulmonary problems. There is no scientific evidence proving that it helps a baby sleep at night.
So with all that in mind,
aside from the possibility it helps with reflux which for me personaly is a debatable issue, what's the benefit to putting cereal in an infant's bottle?