The shot is lit perfectly but there are three (minor) things that I personally find distracting
1. The background; the colour of the wood doesn't do it for me, and there's flash shadowing on the bevelling that is distracting. Aim for either a neutral background or one that's quite colourful... but be sure that your daughter is clothed in the reverse i.e. colourful clothes for neutral background and vice versa
2. Whatever rug or sheet you pose her on, follow the same rules - they should be either plain and without patterns or warmly coloured. Multicolour works well and can add that charm to an infant portrait.
3. Final point: always have someone around who can do a quick wipe of your daughter's face before you take the shot... babies drool, dribble and more - we all know it. It takes two seconds with a wet wipe to fix it before you take the shot... the same thing done in Photoshop can take a lot longer
One other suggestion: I'd recommend that you try shooting at f/2 or f/2.2 instead of wide open at f/1.8... you'll still get the same shallow depth of field but your daughter's eyes will be a fair bit sharper in focus. If you have to bump up the ISO speed then that's fine - your D80 should still give great results at ISO 400 or 500.