We are planning on applying for Canada immigration but my wife is pregnant now. We live in US and she will deliver before Jan 2015.
How should we include the future new born in immigration process? Do we need to re-start our application after the baby is born?
What are our options as we would like to apply as soon as possible?
You can proceed with your application as you planned. There isn't any need to mention the pregnancy at this point, as it doesn't affect the processing.
The immigration medical includes a chest X-ray. Given that the processing will definitely do beyond Jan 2015, there is no urgent need for her to have the X-ray while pregnant. She can do the rest of the medical and then complete the X-ray after the birth.
When the baby is born, you simply add him/her to your existing application. You would need to redo a few forms and include copies of the baby's birth certificate and passport. The baby would also need to have a medical done, which is just a simple physical exam, no tests.