NZ, looks like a lot of us will be "borrowing" your quilt layout! I think I have it figured out.... I love it!
Terri, I have always made my I Spy quilts with 5" squares. I did make an I Spy Irish Chain for my granddaughter with 2.5's, tho. But usually I just do about 80 5" squares, straight set. You can use any size, really.