Some babies sleep better if wrapped up, especially during their first month. Some like to have their hands out. Be flexible; go with what your baby seems to like. You must wrap her in winters anyway.
As the first few weeks pass, the baby should be unwrapped more and more so that she can move her limbs freely. She will start looking at her hands and will get to know the shape of her body better. Most babies tend to sweat profusely on the head. But some tend to sweat a lot all over. Some of these babies, if kept wrapped all the time, may develop fever due to dehydration. This fever will settle down if your baby is kept in cool atmosphere and is given a few sips of cool water with a cup or a spoon.