I am currently making a quilt with a child's baby clothes, most of which are sleepers and knit tops. I have appliqued a teddy bear in a square then cut the clothes to fit as the belly of the bear. I they apply fusible web to the back and applique it on. I do the ends of the arms, feet and the inside of the ears with the same fabric. Its a lot of work but should be real cute when I'm finished.