S.W.
I have let my son (8 1/2) mo sleep with a blanket for a while now. He has a little square blankie- velvet on one side and silk on the other. He also is now obsessed with a larger and thicker blanket that is really soft (from pottery barn, which i love!) He does really well with them. He likes it right up on his face and i can't really do anything about it except take them out, but he cries when i take them away.
If you feel comfortable giving him a blanket, i say go for it.