Silly me, I didn't even think of just moving the knot after the headband was sewn up. Duh. But I do like the idea of the kitchener stitch, too. Sounds like it would be much more neat.
pamelabd--Thanks for the pictures! Cute headband, by the way. I think you're right, it looks like HDC. I knew it looked familiar.
I think that if you crocheted it the knot would be really too big and bulky for its own good so I'd go with the knit stockinette stitch there.
That's a good point. Might be too bulky. I don't know, I'll try a few different stitches and see what works out best. The type of yarn I use might help with bulkiness, too.
Thanks for the great suggestions, everyone!