The pattern I used was Denise or Denephew? with only a slight mod for length, as I wanted this to fit him for a couple of years. I used Berroco Ultra Alpaca Chunky in the tiger's eye color way, and this stuff is SUPER soft. The contrast is actually some Rowan Renew left from my husband's pullover. The S is embroidered in duplicate stitch.
The hat is made from the Cascade 220 I had left from the rollneck pullover I made myself last year (and still have yet to photograph). This hat has since been
chewed on loved by a friend's dog, and I need to make some new pompoms for it, but I still have just enough of the yarn left to at least make a new one for the top, if not the ties also. The pattern is I Heart Cables, which is available for free on Ravelry as well. It's a really quick knit, and the pattern is really stretchy, so the three sizes will easily accommodate infant through adult sized heads. This is the toddler size (and my boys have huge noggins) and it still fits him perfectly this year, too.
I also made my husband a version of this hat (the child size from the pattern) in a light grey Cascade 220 super wash, which he nearly lost the day I finished it. He loves his also, though, and I think I'm going to make my youngest one this year so all three boys can have matching hats. I still need to dig through my stash and see if I have anything soft enough for a baby head in the right weight.