Ok I think I've got it. I went to our LYS (which GASP! is closing! :crying: ) and this was what they told me:
Determine your # of stitches per inch by making swatch with the yarn you want to use. Find out the measurement of the finished hat circumference when relaxed (not stretched around the head). In this case, My yarn gave 3.5 st/inch and the finished hat is supposed to be 17". Then multiply # st X st/inch for number of st to cast on, in this case 59.5 so rounded up = 60.
When I make this project I will have to play around with where to place the cables etc... If it were a that that requires decreases that would require some figuring too, but it isn't - you just knit it straight up, then gather the stiches at the top and put a pom-pom on it. Its from p.30 in the book One Skein by Leigh Radford.