Susan, if you use a yarn over to make your increases you will have little holes or eyelets in your hat. If that is fine with you, then go ahead and yarn over. If you would rather not have a lacy effect, you should try another type of increase. You can lift the yarn between a stitch you have already done and the next one on the needle, twist it and place it on the left hand needle, then knit it. Or you can knit into the front and back of a stitch to make an increase. There are lots of ways to increase. Take a look here:

Here is a link that might be useful: increase

Thanks so much! Good website too.

My personal preferance? Knitwise, knit in front loop (don't pull stitch off yet), knit in back loop, slide stitch off to complete.

Purlwise, I use the method above where you lift the yarn between the stitches over the needle and purl into that. I can't seem to do the front loop/back loop thing purlwise.

Dances.