From the viewpoint of our esteemed contemporary jurists, sacrificing an animal on the seventh day of a newborn's birth, which is what we call a 'aqīqah (عقيقة) is mustaḥab.
Of course, it is highly recommended, and a very important practice anyone blessed with a child should do. It is so much encouraged that even when a person grows old, and they find out their parents did not do it, they can do it themselves.
So, as it is mustaḥab, everything related to it is either mustaḥab or makrūh. observing the etiquette of 'aqīqah is important, but not obligatory. Usually an Islamic butcher would know all these things as well. Also, it can be a sheep, a cow, or a camel, but most people choose sheep.
Let me mention some things:
- The 'aqīqah should be done on the seventh day of the new baby's birth.
- The sheep needs to be free of any deformities or imperfections.
- The sheep should be large and fat.
- The meat should be cut up, but no bones should be broken.
- The meat should be distributed to people, raw or cooked.
- It is makrūh for the immediate family of the newborn to eat from the 'aqīqah meat.
Something that is very bad and un-Islamic to do is rub the blood of the sheep on the forehead of the baby, or anything like this. There is no basis for this, and such practices must be avoided.
With the head and the legs, it is not necessary to bury them, and they can be eaten or given away like the other parts.
And Allah knows best.