What should I dress my 3 week old baby in to sleep? I currently dress her in a baby grow suit with a vest underneath. I then wrap her in a muslin wrap (with her arms free, as she prefers this) & use another light muslin wrap as a blanket, tucked in at the sides & bottom. Is this ok?

Red Nose does not recommend any specific clothing/bedding for a baby for sleep, but has the following information.
Dress baby and use layers as you would dress or use layers yourself: to be comfortable, neither too hot nor too cold.
Dress baby for sleep and add/remove lightweight blankets to ensure baby’s back or tummy feels comfortably warm to the touch.
Remove hats, bonnets, beanies and hooded clothing from baby’s head as soon as baby is indoors.

Red Nose recommend that rather than state how many bedclothes can be safely placed on a baby, parents can work out the amount of bedding to be used after considering these factors:

The room temperature where baby is sleeping.
How hot does the baby feel? A good way to check baby’s temperature is to feel baby’s back or tummy (don’t worry if baby’s hands and feet feel cool - this is normal).
Whether the baby has a cold or infection or another special need.
Consider how many layers that you as the baby’s carer are wearing comfortably.
https://rednose.org.au/article/bedding-amount-recommended-for-safe-sleep

It is important that there is is no clothing or bedding that might overheat baby or cover baby’s head/face.