I'd go with Suzeeq's suggestion -
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Standard baby patterns (except for lace) in non baby colors. Multis, darker or brighter yarn.
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Baby clothes can look modern and appealing by the clever use of colour and a nicely shaped and finished garment. I personally feel motifs and hats shaped like fruit or other unusually shaped items are strictly very much a personal preference thing. It might be safer to stick with simple, modern styles and rely on the use of colour to make the garment eye catching. There are some lovely up to date colour combinations that can be used. I like to keep an eye on what babies are currently wearing and what colours are being marketed in the popular baby wear stores, and use those ideas in my own knitting. Definitely no lace or pastels.
I find hoodies are very popular, and you can make them in sizes from newborn up. Also, these are cute -
http://www.diynetwork.com/diy/na_kni...148516,00.html