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Cute!
By magic loop method, do you mean you are using one long circular needle?
What type of stitch did you use for the "wooly" part (the dark fleece)?
Hi. Yes, I used one long circular needle. His body and top of his head is done by doing the "loop" stitch. I think you can see a video of how it's done on http://www.knittinghelp.com. It goes pretty fast once you get the hang of it.
I must not be with it either since I didn't buy the book. The title does not appeal to me, but I can appreciate that many people find it amusing. It has inspired many new people to take up the needles.