spooky - Nice kitty. In answer to your questions...
It wasn't hard, just different for me. I only knew knit and purl on straight needles, and it called for circular needles, i-cords, knitting with double pointed needles, making pom-poms, and picking up stitches! I only used the Stitch n' Bitch book for reference and maybe my Knitting for Dummies book.
I used Patons Classic Wool Merino Dark Grey Mix yarn which I bought at AC Moore. I had no idea (well, still don't) about yarns or what was the right kind to use, but it had a similar ratio of weight to yardage (which I later found out didn't really matter as much) to the yarn the pattern called for.
I did make a mistake when I was picking up the stitches for the first ear flap. When I knitted on the first one, I had a bumpy row instead of a smooth transition from hat border to flap. I fixed it on the other one, but left the the first one as a reminder.
My vote is for you to go for it (not that you asked for my vote or anything ), because it's fun to wear!