I love EWG (Environmental Working Group). (BTW, that's a link to their site for parents.) They are the ones who brought us the Skin Deep Cosmetics Database, which is just awesome if you're looking to find out what makeup and personal care products are *really* the best ones for you (and which are just a sham).
They have this sensible little blog post on letting your kids play with makeup. They're going to be curious about it... especially if they're like Paloma, and have seen adults applying lip gloss and the like since, oh, about hour one of their lives.
So how to ensure they're not swallowing/absorbing all the lead, phthalates and whatnot? Come up with clever substitutions of course (wouldn't be a bad thing for me to keep in mind, either). Don't be fooled by cosmetics labeled "for kids." It's not safer.
It sucks, but there is zero regulation on most personal care stuff, and most companies can and do put all sorts of truly bad chemicals in there to make the product "perform" (e.g., causing the product to penetrate your skin more deeply, or be more sudsy, etc.). It's not like the stuff vanishes... usually it gets absorbed.
I still use lipstick, gloss, sunscreen, lotion. I firmly believe we have to live in the world and not be paranoid, but the facts are the facts-- some of this stuff is linked to cancer, most of it was *not* around when we were in utero or kids, and none of it is regulated. So get smart, consumers! Some brands are better than others. As usual in the US, yer on yer own (Clint Eastwood squinty eyes). But if you can read and have access to that Skin Deep database, you're ahead of the game.