Here are some pics of the baby feet fleece blanket I am working.
here is a link on how to do the blanket stitch. I'm not very good at explaining things sometimes (I like for someone to show me).
http://crochet.about.com/library/weekly/aa120702.htm
The example is demonstrating on crochet, but the same would work for fabric. I take a tiner "bite" with my blanket stitch. I tried to get a good picture of the tiny stitches, but couldn't. If someone needs me to, I can do a quick block with a contrasting thread that might show the stitches better.