My oldest niece loves Puff the Magic Dragon, and wore a dragon costume for about 2 months straight, so I decided to knit her a dragon for her 3rd birthday. I got the patter from Knitty (http://www.knitty.com/ISSUEwinter06/PATTnorberta.html
). I didn't make any real changes, except I used basic cotton yarn, so it could be washed, and didn't use two strands held together (I would actually do this if I were making it again, because I think it would look a lot better). I left off a lot of the details (i.e. googly eyes) because I didn't want her or my other niece choking on a button or something.
This is the first thing I've knitted that wasn't a basic garter stitch scarf or something, so it's certainly not perfect (see his ridiculously disproportionate legs), but I think it turned out really well in the end.
Here you can see the wings a little better.