What's a Knitter to Do?

I'm thinking about baby knits. My cubemate at work is expecting. (She should find out tomorrow if it's a boy or a girl.) I would like to make something for her, BUT (you knew there'd be a "but", right?) here's the thing. I gifted her with a multi-directional scarf knit in yarn I got especially to match her coat for Christmas (she even noticed and mentioned when I gave it to her "Oh, this is the same color as my coat!") and she never wore it. Never. As in not at all, even though she wore another scarf (from Gap) almost every day. So, not a big appreciator of the handknits. I'm thinking, though, that she's kind of expecting (dreading?) that I'll knit something for the baby. And truth be told, I kinda want to knit something for the baby. But I don't really want to invest alot of time or money on something that won't really be appreciated. And it's got to be machine washable. I have some yarn in the stash that would do, foremost among them Cotton Tots, Cotton Ease, Moda Dea Sassy Stripes, and Jamie. But what to make? As much as I would like to make Hemlock Ring or something else vintage, realistically, it would be a waste of my time here. I'm currently leaning towards a 5HBS in the Cotton Tots (what I have most of in the stash) in either a pink multi and white with a bonnet (girl) or a blue multi and white hooded (for a boy). But then I think this might be the perfect opportunity to design a baby something. I have enough cotton/hemp yarn in natural to make a blanket, but I don't think I really want to make that kind of effort here. Ah, it's a losing battle here. I'm thinking whatever I make won't be used. Maybe I should just stick to a couple pairs of booties and call it a day. One of my knitting friends needs to have a baby!