A few years ago now, I knit a blanket for a cousin's baby. I loved that pattern - which I found on a knitting blog I frequented. Since that time, that blog and its author have all but disappeared. I tried to get permission to reprint the blanket pattern and failed. However, the pattern was printed on her blog for free and I absolutely have no wish to take the credit for it. So, this pattern courtesy of KnitAnnie. The ravelry link is here: http://www.ravelry.com/patterns/library/baby-gimlet.
All details in pattern are from KnitAnnie and do not apply to the blanket that I, personally, knit. Note that the pattern was written by KnitAnnie, so any "I"'s from here on out are her. Also, she's from Australia, so watch out for metric.
Any double knit (8 ply) or aran weight yarn would be fine for this blanket, as long as it's soft and fairly plain. I used Cleckheaton Country 8 ply (5 and a bit skeins) in Colour 003 and 4mm needles.
Finished size: 64cm x 64cm before blocking, 75cm x 75 cm after.
Moss Stitch: *K1, P1, repeat from * to end
Row 1: *P1, K7, repeat from * to end
Row 2: *K1, P5, K1, p1, repeat from * to end
Row 3: K2, *(P1, K3), repeat from * to last two stitches, P1, K1
Row 4: P2, *(K1, P1, K1, P5), repeat from * to last 3 sts, K1, P2
Row 5: K4, *(P1, K7), repeat from * to end
Row 6: repeat row 4
Row 7: repeat row 3
Row 8: repeat row 2
Cast on 104 stitches and moss stitch for 4 rows. This forms the bottom border of the blanket. Moss stitch 4 stitches then follow diamond patter until 4 stitches remain, moss stitch 4 sts.
Continue as above for all rows until blanket is almost square. Moss stitch 4 rows and cast off. Weave in ends.
(katie here: I ended up doing 17 repeats of the diamond pattern to get a square. Plan for something similar)
Image of this blanket (complete with baby!):