The hat is knit entirely in the round, starting with smaller needles for a tighter brim, then the body is knit on slightly larger needles. The stitch pattern yields a squishy and rather stretchy fabric, which is especially useful with children's hats! This is a good hat project for a beginner, all you need to know is how to knit and purl in the round and knit two stitches together.
You can easily substitute required yarn with heavier weight, just pay attention to the row gauge if you don't want to end up with a slouchy hat.
ETA 24.01.2015: Many people have mentioned that the hat turns out too long. I am eternally grateful that they still find it cute with a turned brim. I will edit the pattern, though, to address this issue, but somewhat later. Both versions will be available then.