I found a quilt pattern that I love and made it for a great-niece. It has an embroidered strip for the name (I don't have an embroidery machine so I used templates, as suggested, and appliqued the letter onto the quilt strip). It uses a charm pack sashed with white and bound with a colorful patterned fabric. You can find it at:
http://ocd-obsessivecraftingdisorder...t-pattern.html

I have a pattern for a child's quilt that is striped with a choice of flamingo, monkey or giraffe appliqued on one "corner" (fairly large, but not a quarter of the top) and the child's name appliqued on. Letters are included, but do need to be copied to size desired - so not really a lot different than printing off a font in a word processing program or from internet. Sorry,, don't remember the name of it, and won't be home for a few days.

Thank you to all of you for your suggestions. They are great.
Unfortunately I don't think I'm going to make the quilt after all. We were at my daughter's and grandson's last night. It seems his other grandmother just bought him a new comforter for his bed. So it's highly unlikely they'd take it off to put a quilt on, especially for winter.
Plus I was considering using spiderman fabric for the majority of it. And am having second thoughts as to whether that would just be too much superheros and how long would he like it.
This keeps happening. I was all but on my way to the store to get the supplies for his Halloween Costume when I found out the other grandma had bought him one from the Disney Store. How can you compete with that?

I think you should make it anyway! While he has a comforter for his bed, he would probably love a "blankie" to carry around with him...especially one that has his name on it.

I thought of making a more crib/lap quilt instead. But he's not a "blankie" kind of boy. At 3 he's totally on the go. Never sits still for anything.
I suppose next year when the weather is warmer it might be of use then.

One thing I have learned recently it little ones LOVE things with their names of it. My great niece and nephew are 5 (twins) and I made them pillow cases with little sayings on them that included their name and they were so excited. They share a bathroom and so I embroidered Christmas towels with their names on them - they refused to put them away after the season ended. A friend of mine had 2 foster children (3 & 5), I did towels for them with their names on them and the 3 year old little girl claimed it as her "Blankie". It goes with her everywhere. She was so excited that it was hers, because it had her name on it. I was so surprised, she was showing it to everyone that would look at it.

So make him a TV watching blanket, it will be his, and his alone, because it has his name on it.