I really like to use hooded towels for babies, and even for toddlers.
Often, store-bought ones are thin and not very large.
I bought a large, soft towel, and squared it off to make a hooded towel for our new baby.
I used an old hooded towel to see how large I wanted to make the hood, and cut off a triangle slightly larger than that, to give some room for the seam allowance.
Since I didn't have bias tape on hand, and was anxious to finish the project, I just zigzagged the raw edge, and then seamed that edge. I have put it in the washer and drier since, and it seems to hold up pretty good.
For the hood I just zigzagged the one edge that was raw.
Also, to make it a little cuter, I added some pretty knit fabric on the outside, and some large ric rac.
This is my favorite (and cheapest!) hooded towel we have had so far :)