Knit in the round on two size 2.25 mm circular needles (but easily adaptable to four dpn’s) with sport weight Felici from Knitpicks in Picnic, this tiny hat knits up easily in an evening or two. You can make two to four from one ball of yarn, depending on the size you choose.
The pattern is available as a Ravelry download for $3 CAD and includes instructions for knitting sizes Tiny Preemie, Large Preemie, and Newborn in both sport weight and fingering weight yarns.
*Errata*I was just knitting another one of these and realized I do something “special” that I didn’t write in the pattern. At the beginning of each increase/decrease round, I slip the last stitch of the previous round from its needle so it’s beside the first stitch on my starting needle. Then I can do my cdd and have them line up properly. Anytime you have a cdd at the very beginning of your needle, whether it’s at the beginning of the round or not, you must slip the last stitch from the previous needle to the next needle so it can be part of the cdd. You’ll know you need to do this by counting 8 stitches between each set of cdd’s and m1-k1-m1′s. There must be only 8.