Ruth Instructions how to knit mitred squares are in Vivian Hoxbro's lovely book "Knit to be Square". I used Noro Kureyon yarn in 10 colours, 2 balls of each, and experimented! The colour combinations in this yarn are wonderful!
Ravelry: haraseiram's Baby Blanket :Co 120 on (smallish?) 6 rows garter for border, always at beg and end of row. rows(between border) then 5 rows stockingette- switch color repeat 6 rows, finish with 6 rows garter