Why Talc is harmful?
Here are some link that explains;
From Cancer Prevention Coalition
http://thegreenists.com/tip-of-the-day/tip-of-the-day-go-talc-free/1165
Most importantly, let those innocent babies  stay away from that 'baby's johnson power' smell! We are actually  unconsciously dusting the angels with poisons daily and it could be fatal when inhale.
Powder Inhalation Causes Deaths! 
Since the early 1980's, records prove that several infants die each  year due to accidental baby powder inhalation. Talc is a household  hazard. It is used on babies to prevent diaper rash and to absorb  moisture in the skin, keeping babies fresh. Evidently, dusting with baby  powder endangers your infant's lungs as there is great possibility of  inhaling the product. It is dangerous to expose your baby to this  carcinogen. Swelling and irritation of the lungs may occur when the  powder is inhaled, and therefore may lead to breathing difficulties.  Also, if talc gets in contact with baby's rash or broken skin,  inflammatory reaction may take place and that could be very  uncomfortable.
  
Luckily we have some alternative for talc-free; non-acnegenic products:
Makeup Loose Power from
 AVEDA
  
Busting Power from 
Burt's Bees - Fragrant herbs and flowers lightly scent  cornstarch and baking soda(not sure about this ingredient!)  This 100% talc-free formula is also phthalate- and paraben-free.