there's a great baby blanket in this book: Simple Knits for Cherished Babies
(and a bunch of other cute stuff). Its a 3 foot x 4 foot baby blanket with a garter stitch border and a simple knit stitch the rest of the blanket. and then it has patterns for monograms (a big block letter "K" or "A" or wahtever) that go in the middle of the blanket, done with a purl stitch
I made it with a nice cotton baby yarn.
I really like how it came out