I made a hat and booties. Both patterns are available free - the hat is called "Basic Baby Hat" from the Blog Mama's Stichery Projects. It's really nice and simple.
The booties are knit flat on two needles and sewed up. I tried some other booties in the round but I didn't feel like picking up stitches or doing anything tricky so these were a nice easy pattern. They are called "Bev's Stay on Knit Booties."
Both these ladies do a lot of charity knitting and I think these would be a very nice gift for preemies or newborns in NICU. I think I still have enough of the yarn to make another set of these so if I get motivted I will make them up and keep them around for the next person that's having a baby.