Can you read charts? I made this chart (which essentially shows what wootwoot is describing and what they did in the hat).
This shows just the left half of a small hat, knit in the round. You'd have to repeat this pattern one time to make a full hat.
Row 1: normal k1, p1 repeating
Row 2: When you get to the side seam, you see a (p1, k1) that you have to decrease, so you use a ssp, paired with a k2tog.
Row 3: normal
Row 4: This time, when you get to the seam stitches, you'll see a (k1, p1), so you do the opposite of in Row 2 - you ssk, followed by a p2tog.
...(and so on)
In the chart, you can see that the purl stitches are all stacked on top of each other and the knit stitches are all stacked on top of each other, so it'll look nice. In the real hat, the columns of stitches will actually point towards the peak of the hat in a chevron shape, but that's hard to show!
In this pattern, you'll be decreasing 4 stitches every second row. You can decrease more gradually by decreasing 4 stitches every 3 rows; or you can decrease more quickly by decreasing 8 stitches every 2 rows (repeating this pattern 4 times, essentially making 4 seams).