He's so cute!!

Check out this tutorial for making a hat lining: http://techknitting.blogspot.com/2008/06/fully-lining-hats-with-polar-fleece.html

Well, when you are making a regular hat, you start by crocheting a flat circle until the crown is big enough, and then just add rows until it's long enough.  For a stocking cap, you want to start with a cone instead of a flat circle, so you do fewer increases each row until you have the crown size you want, then add non-increase rows until it's the length you want.  The ribbing on the brim is probably alternating front post dc with back post dc every other stitch.

Here is a pattern for sale on etsy: http://www.etsy.com/listing/62786499/pattern-easy-elf-hat-festive-stocking

And here is a free one: http://web.archive.org/web/20031202150257/http://www.yarncat.com/conehat.html

I haven't made either of these patterns, but they seem kind of like what you are after.

Check out the Lavender Bunny pattern from Rheatheylia.com for something similar: http://www.rheatheylia.com/index.php?page=patterns&id=3

It's a cute hat!  The dc is the increase in this round.  Just draw up the yarn in the space between fpdc #2 and fpdc #3 of round two.

So into the first 4 stitches of round 2, you will make 5 stitches in round 3:
fpdc in first round 2 stitch,
fpdc in second round 2 stitch,
dc in between stitches 2 and 3 of round 2,
fpdc in third round 2 stitch,
fpdc in fourth round 2 stitch.

Thank you soozeq!  That makes a lot of sense - I'll give it a try!

Hm, thanks for the tip, Roslet.  I am having a hard time finding any kind of tutorial for the WRN stitch, so I thought I'd ask if you know of a good one?  I'd love to try this out for my hat!

Thank you everyone!  It does look like twined knitting, and that is a very helpful link for a tutorial - I appreciate it   Embroidery might be an easier way to go for the effect, as well.

So I was browsing through the Top Down Bonnet (http://www.ravelry.com/patterns/library/top-down-bonnet-with-anime-character) completed projects on Ravelry, and I came across this one with a different finishing/edging.  I'm pretty sure I could easily find something similiar to the crocheted picot edge, but I'm a fairly inexperienced knitter, and I can't figure out what is going on with this part leading up to it that kind of looks like a rope (see arrows.) 

Can anyone help me figure out what this is and/or how I might replicate it?

P.S.  I did message the maker on Ravelry a while ago but never got any response.

I like the "best bunny" pattern from Lion Brand.  It's free and always looks very cute.  Plus the pattern calls for one main color and one accent color.

Here's the link: http://www.lionbrand.com/patterns/60480A.html?noImages=

Or, you can just go to lionbrand.com and search for best bunny.