Hi, I went and read through the pattern at the Lion Brand site. When it says, "leaving the center 8 sts. free", it is talking about the 8 stitches that you bound off at the center when you began the neck shaping in the front. They want you to pick up 34 stitches around the neck, but don't pick up any of those 8 stitches right in the front; that allows a place for the kids face to stick out the hole. :-) Begin picking up just to the left of those 8 stitches in the front (that will be the right front of the sweater as it is worn by the child), and work around the neck and back to the other end of the 8 stitches that were bound off for the neck shaping.
They had you make a rolled edge and then ribbing at the bottom of the sweater and at the bottom of each sleeve. You also do the same thing around the edge of the hood. It is that edging they are talking about tacking down at the center front of the sweater.
Sew rib/roll Front at center neck, overlapping center fronts right over left for females. (the opposite for males)
The picture of the sweater doesn't show enough detail for you to see where this was done. It may not seem necessary but if when you try it on the edging sticks out or something you may understand better what you would want to do with it to deal with it. I can't tell in the picture that the edging on the hood is overlapped in the center front and sewn down. It sounds to me like it is saying to tack the edging down right in the middle of the "U" neck shaping (where you didn't pick up any stitches there right in the front), overlapping one way for a girl and the other for a boy. Hopefully when you get to this part you'll see what needs to be done to make it all lie correctly. Or like I said, maybe it won't seem to need this.
Let us know how it turns out.