I'm sure hundreds of parents have figured this one out before, but I discovered a fantastic way to help big sister Z hold her new baby sister. I place a Boppy pillow around her waist while she is seated on the couch. Baby A nestles perfectly on her big sister's tiny lap and I don't have to worry about my two-year-old providing adequate head support for the newborn.
Z loves using the Boppy because she sees me using it so frequently for nursing. In fact, if Baby A starts to fuss, Z runs and fetches me the Boppy and a tube of Lanisoh ("purple cream") and demands I feed the baby right away.