In The Hood
I just finished what will probably be my last pre-birth knit, the Hoodie Baby Blanket from Magknits (as modeled by my daughter's Snow White Doll). I decided with this baby to go practical rather than heirloom and this towel/blanket perfectly fits the bill. I knit it up in Cotton Ease, so it was fairly inexpensive too. A little bit of a boring knit (just straight stockinette for the most part), but I think we'll get loads of use out of it once our little man arrives.
There's more info on my blog if you're interested.