I, too, adore Sugar 'n Cream!!
I've made potholders with it by doubling it up on size 10 or 10.5 needles with a reversible stitch (seed stitch is my favorite, but I've also done a diagonal garter stitch (which my mommy loves!). I can get 2 8" square potholders out of one skein of variegated "super size" yarn.
P.S. They have a new stripes line of yarn. I couldn't find it on the Lily website, but I saw it at Jo-Ann and again at this website
. It seems really cool and gives a different effect than the variegated ombre yarn. I haven't tried it yet, but I might try it for some baby hats.