For the material, what ever you decide to use (cotton or flannel), just make sure it is nice and soft for baby's skin. Some can be rough so you'll have to feel it.
Pattern could be anything you want, not just patterns for 'baby' quilts. Tradtional blocks made using baby pastels or bright primaries IMHO work well. So just chose something you wouldn't mind sewing. It can be as complicated or as basic as you want to make it.
The size to some degree depends on what you want the quilt to be used for. (IMHO) Here's my expience having 2 young sons, and having my mother and a grandmother who love to make quilts: I have several quilts that my boys have used at varius stages. I have a couple of small ones - probably 30 in. square, maybe 36in (now packed away since the youngest is now 3) that my boys used early on as a mat to lay on the floor. Once they started getting mobile these no longer got used as it is too small for much else. I also have a few that are about 40 x 50 to 40 x 60 inch range. Theese work well as play mats, for snuggling, as super hero capes etc. and also work great on toddler sized beds (since you don't have kids you may not know - a toddler bed is the same size as a crib and low to the floor for kids that are too big for cribs, but not quite ready for the bigger twin bed). My yongest has a twin quilt made by his grandmother that he likes to use on his toddler bed. It doesn't work well though, because it's too big and falls off his bed sometimes 3-4 times a night becasuse there is just too much of it. My older son now only uses twin sized quilts and he's 6. His baby and inbetween quilts are now put away for use by visiting babys and hopefully someday, his kids.
All that being said, if it were me making the quilt, I would make it in the
40 x 50 or 40 x 60 range because that's what I would personally find most usefull right a way, and yet wouldn't be too small in a few months when the baby is mobile. And then, if I wanted I could aways make a larger quilt for the child in a couple of years when they out grow that one. This is obviously just my take on it. Other's views will vary.
Good luck with the project and congrats on the new great-niece or nephew.