Thanks so much for all your ideas! You've really inspired me. I read through all the suggestions, and drew up sketches of all the ones I thought would be doable in the limited time I have. Here's a sketch and a brief description of each one, to help you make your choice:
1: Mistletoe and holly: little white or red berries with options for each kind of leaf. I think these would be great on their own, or to add to wreaths, table decorations, etc.
2: Pullover: this would be based on a simple pullover pattern, with striped sleeves, and a snowflake worked as intarsia on the front.
3: Skirt: to dress-up your toys for the holidays. It would be knit in the round (with optional instructions for knitting flat), possibly with stripes or a colour-work design.
4: Mouse: a small ornament, with bobble feet, and with head and hat sewn on.
5: Elf hat and boots: to fit smaller toys. A pointy striped hat, and boots with pointy toes. Both items would probably be easiest to design knit in the round.
6: Sleeping bag and pillow: simple and quick item to knit, and a nice addition to a gifted toy.
7: Angel wings: similar design to wings from owls/penguin/duck patterns. I'll probably add some way to strap them onto the toy. (there are lots of dress patterns already which could be adapted to make an angel's gown)
8: Elf: I know people probably wanted a full-size elf toy, but I just haven't time! This would be made similar to the mini alien (and much cuter than my terrible sketch).
You have until Sunday evening to vote for your favourite idea. I'll choose the winning design based on which gets the most votes and which one I feel most excited to design. Hopefully it won't take too long to get ready for you, so you have a few weeks to get your needles busy!