Just made a recent discovery. If you are using Lightroom 2, there is a local adjustment brush call 'Soften Skin' in the Development module. Besides working on softening skins, I also found that, if you want to soften just the background to get that 'creamy' look, you can use this same brush. Just paint onto the background to make them even softer. I find that it works better (and look more 'natural') in Lightroom than going into Photoshop to use guassian blur. Experiment with different settings to see what works for you.
Just sharing a recent discovery, and hope it will be useful to fellow clubsnappers.
Have a good week ahead!!