Cast on 88 or so, depending on your guage and size of head (88 is a good size for me with worsted weight on size 7's) using two yarns. K1 P1 rib for two rounds holding both yarns together. On the third round (you could do more rib but I don't have the patience) start double knitting: K1 with MC, move both yarns to purl position, P1 with CC, move both yarns to knit position. Continue with this pattern until when you try on the hat it comes down to where you like it too and goes up about 3 and a half inches from the center of the top of your head. Do the double knitting pattern nine times, and then you have to K2tog and p2tog. What you do is lift the MC yarn over the CC yarn for the K2tog, then put both yarns in purl position and P2 tog. Simple as that. continue in this pattern all the way around. Do one row knitting (K1MC, P1 CC) all the way around, then do the K1MC P1CC pattern 8 times and then the decrease around. K1MC, P1CC around. Continue with these two rows, doing your decreases every other row before you get to the marker, until you get down to 8 stitches of each color. Thread the MC yarn through the MC stitches and CC through the CC stitches. Pull the MC stitches tight and tie on the inside, then pull the CC stitches tight, tie, and sew the needle through so that the yarn is in between the layers.
To put a pattern on this hat, simply switch which color you use for your K1 and which is P1 for the pattern stitches. I've also managed to do Fair Isle on the MC side but in the future I will be keeping that to a minimum, its getting to be way too many yarns getting tangled together.
I've made a lot of these and they are really really warm and knit up fairly quick if you use a simple design.