The week before the girls were born I waddled into my sewing nook and made a dozen large colorful swaddling blankets from Anna Maria's Folksy Flannel. I purchased a yard of each and squared them up with my rotary cutter and finished them with a rolled hem using my trusty serger. The remnants were also hemmed and added to my basket of wash cloths and burp rags so I literally used every square inch of fabric for this project. They were by far the easiest and most useful items I made for the babies. The Folksy Flannel is a wonderful weight for this sort of application and the colors are simply gorgeous; I can't tell you how many compliments I received.
The only thing I would do differently next time is to make them bigger. We swaddled our girls for a long time and once they got to be about 13 pounds they started to bust out of them. I made a few more from 1 1/4 yard pieces and they worked until we stopped needing them at about 6 months old. They are still in great shape (even after many washings) and I'm sure I will be able to re-purpose them at some point in the future. For now I'm keeping them in the bin with the teeny-tiny premie clothes that I can't bear to part with.