C.
Coming from the mom of 4, I've seen it done all ways. I think as your child gets older, it is ok to just invite certain people. They understand a bit better. As for the preschool class, I think it is really tacky to only invite certain ones. My daughter had this happen at her preschool last month and it was very uncomfortable. The mother handed out invites to certain people while proclaiming loudly about not inviting the whole class. Luckily my daughter was one of the ones invited, or I'm sure I would have had to try to make up an excuse. I understand budgeting issues and needing to put a cap on the # of people. You also need to understand that most of the ones that are invited from class rarely show up. ;)
Good luck and Happy Birthday to your son!