[facade]

My parents are Catholic, and so am I.

I think the parents shouldn't succumb to the pressure of the grandparents. It's their child, and from what you said... the mother doesn't care if the baby is baptized, and the dad doesn't want their child to be baptized...
While a Catholic baptism is usually done while you're young, and usually as a baby... you can still be baptized when you're older. As Jorge said, maybe you can talk to your friend and suggest they don't baptize their child but as they grow up... talk to them about both religions and/or other types of religion and let their child decide whether to become a religious person or not.