Interesting to see others sing their babies to sleep with this song. I have always used it to sing my son to sleep, and he still asks me to sing it sometimes (he's 10). Like you said, not exactly a lullaby, but something about it. I sing a more tame version of it, the one found on Sheena Wellington's album Strong Women:

http://new.music.yahoo.com/sheena-wellington/albums/strong-women-live-at-nitten-folk-club--98923

I've wondered about the meaning of the line "when I played on your machine." I have a guess about the meaning, but...