I'd suggest Plymouth Encore, the yarn used for the Great American Aran Afghan. It's soft, washable and reasonable.
As for what squares to use, look and see which ones you like best. Do you have the GAAA booklet?
"Trust the pattern!"
Time flies like an arrow, but fruit flies like a banana.
Hop aboard while we follow the cloud-covered van of knitting harmony, man!! Woooo!! --Hedgehog
IngridKH on Ravelry