No, I'm not having a baby, but I been asked to knit baby blankets for two different babies. One mother is our mobile dog groomer in Lancaster and the other is the daughter of a friend. Neither one wants a blanket in the typical baby colors, so I've recruited a hand dyer to help me out.
Here are the two colorways I've proposed to her:
These photos are taken indoors and outdoors, respectively. The yarn is Lion Brand Microspun and the colors on the left are lime, turquoise, purple, and fuchsia. The colors on the right are yellow, orange, tangerine, and lavender. I think the purple is a little too dark, but other than that I like these colors. However, Microspun is sport weight and that's just too small for me to knit an entire baby blanket from. I'd get bored and never finish it. The yarn we're using is a superwash worsted weight merino, so it's soft and machine washable. Both of these characteristics are important for babies.
The pattern I'm going to use is Argosy. As Vyvyan mentions, Kay (Mason-Dixon Knitting Kay) has knitted one already. Vyvyan is going to knit her own version and write up the pattern fairly soon. I really like this pattern and have already made several scarves in it.
I think this is going to be fun. I'll get back to you after I'm about halfway through the first one, though.