Well, here's my opinion for what it's worth. My latest baby sweater I changed to be knit in the round and i'm so glad i did it. who wants the bulk of seams on something so small? And I think your yarn choice is GREAT, i love that yarn and your cables and seed stitch are totally visible. Finally, the last baby sweater i made? too small! the baby never got to wear it! arrrrggghhh. so if you think it's too big, roll with it. it's way better than too small.

I think there's tons of Olympic Knitting backlash going on in blogland, and this seems to be right up there with it. Although, I've done this wishy-washiness with sweaters for me as well. I hope you find some fortitude and just go for it.

I try to knit whatever I can in the round, and especially baby sweaters. I think baby sweaters are made boxier because babies tend to be a little pudgy and square shaped. Of course by the time one is 1 or 2 they've worked off all that baby fat when they've started walking.

Cute pattern though.

I think the yarn looks awesome. And 26 inches doesn't seem that big, does it? You probably want a bit of ease? Heck, my thigh is probably... wait, I don't want to know.

As for knitting in the round, I would probably be tempted to switch. But I actually like knitting cables flat because it helps me remember which row I need to cable on. But I guess there's only the one cable.

The yarn is fabulous!

As for the size. If the nephew is 6 mo now... and it's ALMOST full fledged springtime, he might not get to wear it much before next fall at which time a 1-2 year size would be perfect.

This coming from my non-baby-ified experiences. *shrug*

Good luck! -j.

Hi! Just cruising around the knitblogs and thought I'd say, I have the same problem. I have 2.5 nephews (third is on the way!) and I consistently knit things too small for them. Something about not being around babies enough, I suppose, makes me underestimate their actual size. So I say go with the pattern.
Also, LOL at cookie's comment. Resisting the strong urge to measure my thigh in spite of myself.

The yarn and stitch pattern is beautiful, go for it!

Go for it. They'll put it on the kid when it fits. Their heads are big and need to fit in through the sweater.

Run with it baby, run with it. And if all goes south, well, it's small and will fit on a big teddy bear. It'll be the best bear sweater EVER.

I like knitting big for kids because (1) they will eventually grow into it and (2) less stress in case I knit at a snail's pace on the garment, maybe by the time I finish they'll have grown.

1-year size will be fine, I promise. But, be sure to make it a bit on the long side. My pet peeve is that so many baby sweater patterns are really short and wide, as if every baby is super-pudgy. My kids outgrew sweaters in length long before they outgrew them in width. Sleeves can be rolled up if they are long, but not easily lengthened if they are too short.

A friend made that same sweater for my son, in the smallest size. I held onto it and he wore it for the 1st time on his 18 month "birthday". My son is a pretty big boy, too. I did like seeing it in the closet and admiring it all this time! I really like it, it's even the same color as yours, but his is Brown Sheep Cotton Fleece. Anyway, I think it will be fine and they will love it.

I wonder if kid's sweaters are so big because otherwise kids won't put them on?

I don't think the yarn is too textured, though.

I'm about to start this in about a week or so! Can't wait to see when you continue. And I agree with the other commenters - they eventually grow into these things. I don't even bother with gauge swatches, just use the called for needles and knit one bigger size. My little guy grows super fast.

speaking as a new mom, I like like the bigger action because it's hard to get baby's arms into the sleeves! My son wriggles around like a little trout, very challenging to dress as it is so bigger sizes of pullovers make things easier. Personally, I am a big fan of wrap things and cardigans for young babies. No over the head action!