I love the Lion Brand pattern for the diagonal baby blankets, http://www.lionbrand.com/cgi-bin/patternFinder.fcgi?search=Search&searchText=diagonal+blanket&x=3&y=12
They knit up so quickly and are very easy to knit. They look pretty but are very practical too! I used up lots of very fine baby yarn that had been hanging around for several years, as well as other oddments of finer yarns. I usually knitted two different coloured strands together to make them more interesting (and a bit thicker). All the ones shown in the slides were donated to a local charity where they were given to new babies who needed a blanket. The smaller ones in the finer yarns are a suitable size to use as receiving blankets. The large blue/green one was knitted from Lion Brand Homespun Baby http://cache.lionbrand.com//yarns/homespunBaby.htm
. As the yarn is thicker, the blanket knits up much larger and would be very suitable for a crib.