Communication advance in months after birth tied to language learning
Babies take a critical step toward learning to speak before they can say a word or even babble. By 3 months of age, infants flexibly use three types of sounds — squeals, growls and vowel-like utterances — to express a range of emotions, from positive to neutral to negative, researchers say. Infants’ flexible manipulation of sounds to signal how they feel lays the groundwork for word learning.
Psychologist David Lewkowicz of Florida Atlantic University in Boca Raton remains unconvinced that infants, especially at 3 to 4 months old, flexibly communicate with sounds. He notes that in the infants’ distinct approaches to matching sounds with facial expressions might reflect confusion more than intention, Lewkowicz says, because babies don’t perceive and understand adultlike emotions until at least 6 months of age and don’t see a relationship between others’ facial and vocal expressions until around 8 months. Parents could also have subtly influenced how their babies vocalized in the lab, he suggests.
I dunno, I've worked with young infants and they always seem to understand each other, squealing and all. Baby sign language is fascinating, and babies do not get enough credit :P and as io9 noted, babies can understand you at six months.
My money's on baby telepathy.