I have this theory about knitting for kids, and I think I have said this before: The theory is that they don't notice if your gauge is off or if you've made a so-so yarn choice. Erica made this cute School Spirit Sweater for her daughter and she reports that the light blue (Handicrafter Cotton by Bernat) is a bit fatter than the Peaches & Cream and it wonks out the sweater a little bit.
She reports that her daughter doesn't mind at all, so I guess my theory stands true.
http://ericah.blog.com