My ex-housemates just had their second child, so I improvised a hat for the little sweetie. http://www.goblinko.com/ljpics/minahat.jpg
I made it using cotton yarn with a little polyester 'fur' for the bottom edge and the ball on top.
gauge = 5 sts per inch
size 6 dpns
Cast on 77 sts with both yarns, divide between 3 needles (22, 22, 33).
Join and knit in garter stitch (knit one row, purl one row) until it is 1" long.
Break fur yarn and switch to stockinette stitch (knit all rows) until it is 4" long total.
Place markers to divide sts into 7 groups (after every 11th st, and using the needle divisions as markers).
Decrease as follows:
Round 1: *knit until 2 sts before marker, k2tog* repeat around
Round 2: knit even
Round 3: repeat round 1
Round 4: repeat round 2
Round 5: repeat round 1
Round 6: repeat round 2
Repeat round 1 until 7 sts remain.
Knit even for 3 rounds, then join the fur yarn and make ball as follows:
Round 1: knit into front and back of each st (ending with 14 sts)
Round 2: *k1, knit into front and back of next st* repeat around (ending with 21 sts)
Rounds 3-5: knit even
Round 6: *k1, k2tog* repeat around (14 sts)
Round 7: k2tog all the way around (7 sts)
Break yarns, thread through 7 sts, pull tight and thread to inside.
Stuff ends of yarn into ball (plus some extra to make it firm), and tie off yarn under the ball so that the stuffing doesn't come out.