Hi Janelle -
My mind veered in the same direction - back to those deformed babies. Well, it is precisely those deformations that led researchers to revive this drug as a tool against cancer. Those deformed limbs were caused by failure of blood flow to nourish the growing fetal limbs. When it was discovered how the drug worked AGAINST the development of the babies, other purposes began to be possible.
As for who should take the drug - if you are still in child-bearing years you have to agree to use TWO forms of birth control. The woman I know on thalidomide is about 60 and just became a grandma!