Erythromycin is the typical eye ointment used in newborns. States used to use silver nitrate but have since stopped because it would burn the infant's eyes. Certainly the goo in the eye can hinder sight for a short period of time, and this is why many parents list on their birth plans that they wish to delay the treatment.
The timing and administration is usually dictated by state law. Though some practitioners will simply go by their personal or hospital policies. If you have a question about skipping eye ointment for your newborn, start with your practitioner.
CDC. (2010) Conjunctivitis (Pink Eye) in Newborns. Accessed on January 24, 2011 at http://www.cdc.gov/conjunctivitis/newborns.html