I just googled children's hat measurements and found this hope it helps!

Preemies:
1 -2 lbs
Baby's Head Circumference is 9" - 10"  (so hat circ. should be about 7.5" -8")  Height of hat should be 3.5 - 4"

2 - 3 lbs
Head Circumference 10" - 11 1/4"  hat circ = 8.5" - 10"   Hat height  = 4"

4 - 5 lbs
Head Circumference 11 1/2" - 12 1/2"  hat circ = 9" - 11.5"  Hat height = 4 to 4.5"

5 1/2 - 6 lbs
Head Circumference 12 1/2" - 13" hat circ = 11" - 12"  Hat height =  5 to 5.5"

Newborn
Head Circumference 13" - 14 "  hat circ = 11.5" - 13" Hat height = 5.5 to 6"

Baby - 3 to 6 months 
Head Circumference: 14" - 17 "  Hat height= 6.5 - 7"

Baby 6 to 12 months
Head Circumference: 16" - 19 "   Hat height = 7.5"

Toddler - preschooler (12 months - 3 years)  Hat height = 8"
Head Circumference: 18" to 20 "

Child (3 - 10 years)  Hat height =8.5"
Head Circumference: 19" - 20 1/2"

Pre-teens and Teens  Hat height 9-10"
Head Circumference: 20 1/2" - 22"

Adult Woman
Head Circumference:  21.5" - 22.5"  Hat height = 11"

Adult Man
Head Circumference:  23" - 24"  Hat height = 11"-11.5"

Thanks!!!  I'm going to start doing cat hats for kids.

Ok for anyone who knits.  Here is a video on how to knit in the round using 2 circular needles.  If you knit socks or hats and have to use double pointed check this out.  I swear this technique changed my life.  Ok I am a total knitting geek obviously.

http://www.youtube.com/watch?v=RybPvCNfrT8

Fiberpuppy, my boys would love frog hats!

As for the sewing machine, my mother recently bought one from Sears to use for a variety of things. One is the place mats we are working on. She has been able to sew 2 layers of cotton fabric with binding tape and bamboo batting and has not had to change to a heavy duty foot. She did not spend a ton on her machine certainly less than $200.

It's a Kenmore 18221

http://www.sears.com/shc/s/p_10153_12605_02018221000P?vName=Appliances&cName=Garment+Care&sName=Electronic

That is a good idea for the paci leash.  I went to Hobby Lobby and got a scrapbook container that had two zipper sections.  One had a plastic container.  I took that out and bought 10 binder pockets with zippers.  Then I labeled each one with a needle size and in go the circs.  The other zipper section holds my Knit Picks Options needle set.  Helps tremendously! 

Knitting Help has a great video on Magic loop at http://www.knittinghelp.com

Wow,  that's going on my wish list.  I swear etsy is so creative.  Every time you think you have an original idea you discover someone on etsy who already makes it.

Cool