Something that has not been mentioned here is that Steve Irwin is only doing what is 'normal' in his family. His father raised him in exactly the same way. That is why he is so able to handle dangerous animals. Because he has so much experience dealing with them.
I disagree with the people on here who have said that 'crocodiles are unpredictable'. That's just not the case. Crocodiles are animals which follow animal instincts. If you know what the instincts are, you can be safe. I have been to Steve Irwin's Australia Zoo in QLD. I saw the exact same display that Irwin was filmed doing (minus the child). Crocs are most dangerous when in the water. This is because they are extremely quick swimmers. An unsuspecting victim in the water has no chance of outswimming a croc. This is how the majority of croc attacks occur. On land, the croc is far less dangerous. A human can easily outrun a croc (the most effective technique is to run in zig-zags). When a croc is about to strike, there are a number of signs which the experienced handler can recognise in the croc's body language. Steve was able to lie down less than 3m from a croc for about 20 seconds, because he knew it was not about to attack.
Additionally, at the Irwin zoo there are a number of other handlers within the enclosure or at the fence at it's perimiter. Their job is to keep another set of eyes on the crocs, so that if Steve can't see a croc, they can let him know where it is, etc.
Irwin's family home is within 30m of a croc enclosure. The Irwin kids need to know how to live in that kind of proximity with the crocs, and how to be safe around them. Some people say "how can a 1 month old learn anything about crocs". It's not about learning a direct lesson. Its about being exposed to crocs. For the Irwins, it is 'normal' to be around 'dangerous' animals. The earlier that crocs become a normal part of the Irwin kid's lives, the safer they will be. A healthy respect is needed when around animals of all kinds, and that starts at an early age.