Jen from iCandy Handmade shares a free pattern for making her Tiny Tunic with a peplum. The peplum is a variation on her original Tiny Tunic (free pattern here). Neither the jersey knit bodice or the quilting cotton skirt require much fabric, so this is a good project to use up bits of pretty fabrics left over from other sewing projects. I foresee me sewing up a stack of these to keep on hand for last-minute baby shower gifts. Her free pattern makes a size 3-6 months. If you need another size, it should be easy enough to adjust it up or down. Go to iCandy Handmade for the pattern.
[photo from iCandy Handmade]