I finished a poncho for a baby shower I have coming up. I do love this pattern. I used Paton's chunky yarn, which is an acrylic wool blend. I must say, I do love it. It is so soft, and nice to knit with.
The pattern does run really small. I used size 10 needles, although the pattern calls for 8's. I would recommend knitting the next size up if you are going to use the 8's and worsted weight yarn. You could also do what I did with bigger yarn and needles and knit the correct size.
I know the new babe won't be able to wear this right away, but that is okay, since she will be born in July, and hopefully will not need a wool poncho for a while.
Besides, I thought she might need a bunny too.