The lining is a really cheap cotton print that I found at Wal-Mart and backed it with a stiff interfacing so it would stand up on it's own and give some shape to the purse. I also lined the strap, which was hand sewn, so that it wouldn't stretch out to her knees when she wore the purse.
I made a "ribbon" that ran around the top of the purse and tied in a bow on the back, as you can see here. The ribbon also served as a means of attaching the lining to the purse without compromising the yarn. I'm rather proud of this ingenuity, actually.
I made the lining two pieces with stiff interfacing in between so that the pink of the material would fill in any "gaps" in the yarn between cables. It created a really nice effect and was better than just lining it with one piece and white interfacing.
All in all, this was fun and didn't take absolutely forever to knit and put together. If you'd like the pattern, comment and I will post it later.