I used leftover Lion Brand "Homespun" yarn. For the record, I hate this yarn. It's hard to knit with because it catches on everything, it unravels as soon as you snip an end, and it shows wear pretty fast. I used it because I didn't want to use anything nicer for a dog bed. The pets seem fine with this yarn though.
I used the Snug Harbor Knit Snuggle pattern. I used size 13 needles. I didn't follow the patterns advice on when to use the contrasting colors. I decided to just knit with the blue until I ran out and then switch to purple.
So, Gracie and Lucky, you need to share this bed with Oscar until I can face knitting another one of these beds. You guys will just have to suffer with sleeping on the couch pillows, the afghans, and the laundry until then.