I used a half-acrylic, half-wool yarn for this, Filati's Oslo, and I really enjoyed working with it. Has the feel of a soft, high-quality yarn, but the acrylic adds washability and durability which is a must in a child's garment. I liked the nature-oriented color selection too. It's saturated without being garish, and it's a bit different than the usual child's primaries or pastels.
I have a bag where I put finished objects for which I haven't yet got a recipient selected. I'll put this in there along with the green socks I posted a couple weeks back. Yes, I know I could frog back the socks, stop the pattern earlier and close off the toes, but it wouldn't have the graceful pattern ending it does now, and I'm lazy. I think I could make a new pair of socks just as fast :-)