I was so delighted when my son and his wife were expecting my first grandchild, that I got out my knitting needles and made them this lovely baby blanket with Lion Brand's pound of love. http://cache.lionbrand.com//yarns/pound.htm
The pattern came from a booklet called "Knit One for Baby", http://www.nakedsheep.com/knoneforbabl.html
and was called little Boy Blue (although I knitted it in Lavender on No 11 circular needles)
As you can see it came out beautifully and wrapped up little Ian as snug as a bug in a rug. I also knitted one in blue for a co-worker to take as a shower gift as she knew her friend was expecting a boy. I think I like the lavender one the best.