Cortisol levels have been used a lot in research on attachment theory. There it is often linked to individual differences. Search Google Scholar with "attachment cortisol" and you'll find plenty.

Hi George, along with the work on attachment mentioned by Martin, above, there is interesting work being done in regards to painful neonatal procedures as well as prenatal stress and subsequent infant cortisol response. I put the search terms in Google scholar to give you some indication of the fields. Hope these links are a good starter for you.

http://scholar.google.com.au/scholar?hl=en&q=neonates+pain+and+cortisol&btnG=&as_sdt=1%2C5&as_sdtp=

http://scholar.google.com.au/scholar?hl=en&q=prenatal+stress+and+neonatal+cortisol+response&btnG=&as_sdt=1%2C5&as_sdtp=

Mary Dozier's group at Delaware have done a lot of work on Cortisol reactivity in very young children and would be worth a look eg

Bick, J., Dozier, M. (2010). Mothers' and children's concentrations of oxytocin and vasopressin following physical interaction. Developmental Psychobiology, 52, 100-107.

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Bernard, K., Dozier, M. (2010). Examining infants' cortisol responses to laboratory tasks among children varying in attachment disorganization: Stress reactivity or return to baseline? Developmental Psychology, 46, 1771-1778.

Thanks for everyone's help. Much appreciated.

Minuchin used cortisol levels in his studies of family therapy for adolesents with anorexia

Megan R. Gunnar at the Institute for Child Development at the Uni of Minnesota has done some fabulous research in the area of basal and reactive cortisol levels in children. Her group has looked at the effects of nap time, day care, starting school, maternal depression, the impact of institutional care (orphanage), etc. Not only is her work interesting but she really sets the gold standard for things that one should consider when conducting cortisol research in children.  Below is a link to her lab's page and a brief list of publications.

http://www.cehd.umn.edu/icd/research/gunnarlab/publications.html

This is an interesting study on cortisol regulation among maltreated and nonmaltreated children assessed over time (2 consecutive years): 

Alink, L. R. A., Cicchetti, D., Kim, J., & Rogosch, F. A. (2012). Longitudinal associations among child maltreatment, social functioning, and cortisol regulation. Developmental Psychology, 48(1), 224-236. doi: 10.1037/a0024892

There are a good number of excellent research studies measuring how time spent in day care impacts children's stress levels/cortisol levels.  No pun intended but you will salivate at how this studies us your variable, cortisol levels,

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2946618/

http://profam.org/pub/nr/nr_1710.htm

http://eric.ed.gov/?id=EJ742888

http://robertsonlab.human.cornell.edu/pdfs/WatamuraPNE10.pdf

I am certified in infant mental health so this is not whatsoever surprising to me.