Well, I finished the bag/purse - I'm still not exactly happy with it, but it's finished.  I think that the white elastic is way too prominent - I'm thinking of getting a purple pen and coloring it - at least it wouldn't jump out so much.  Now to fill it up with presents for the baby!

I like the concept, and I think when (if?) I make another cover for it (I have more material), I will try to make the loops smaller (and hope coloring of the elastic helps!)  I may even make one for me - but with a couple of modifications.  I think I like the bag without the cover better......but I would make it in a heavier fabric if I was just using the bag.