Child porn downloading needs to be made illegal to increase the cost of making and distributing it. That is, if downloads weren't illegal and the people downloading it weren't afraid of getting caught, their cost/benefit would be different. Making it legal to download but not to make child porn decreases the cost for consumers, which would make it more easily profitable for sellers. And for producers in foreign countries would have more direct, legit distribution. That would encourage more child porn, etc.
As it is, I see no problem with banning something heinous all the way from its act to the distribution of it, so long as the people along the way aren't paying to see said act. Creating child porn should be made as costly, as dangerous, as illegal as possible, and the dissemination of it similarly so. It's not just obscene material, which can be broadcast for the national good (such as terrorist videos, assassinations of world leaders, the WTC attacks,) it's obscene material -created- by people who sought to create obscene material and profit from it. That's the distinction. I would consider true snuff films to be in the same category. This isn't just some journalist sneaking into Burma and taping a protest and the subsequent killing of monks in order to show the world what's happening. That journalist did not cause those events to happen, he is a passive observer informing the world of a tragedy. The people shooting child porn or taking pictures of it... ugh, they are causing horrible things to happen with the intent of distributing them.