How do i knit this hat?

I am planning to knit a kinda like this one--> http://jordanapaige.com/blog/wp-content/uploads/2010/10/mila.jpg but more simple like a simple knit purl pattern... i have size 3 needles..but i want to know how many stitches to cast on. i measured the part of my head where i want it. it is 20 1/2 inches. but should i round it to 20 or 21? im not sure what the gauge is for the yarn i have because i dont have the wrap thing that it came in. for some reason i think it is a size 4...heres a picture of the yarn: http://mail.aol.com/33912-111/aol-6/en-us/mail/get-attachment.aspx?uid=26780820&folder=Spam&partId=0 i dont have circular needles.. just straight. any good patterns? or tips?