In my meanderings on eBay, I've found numerous handmade tote bags which are
decorated with blanket stitches. In each instance, the stitching is so
perfect that one wonders if it is done by hand or machine, but I am not
aware of a sewing machine capable of producing blanket stitches, and the
stitching has a much more prominent (heavier?) appearance than ordinary
machine stitching, as if more than one thread was used. Is there such a
machine on the market? I very likely will not be able to afford it. My old
clunker will probably have to keep me happy for a long time.

The industrial version I've seen in operation is called a Merrow Crochet
machine -- I believe I heard a home version was out, but I'm not sure of that.
http://www.merrow.com/crochet/crochet.htm

Got a serger? Try a mock blanket:
http://www.sewvac1.com/Library/sergingtips.htm
http://www.ylicorp.com/Newsletter.html

I've also programmed my sewing machine for a combination of (several zigzag
stitches, W 6.0, L 0.0, followed by a 2-3 triple straight stitches in the
far right needle position,) repeat ad infinitum for a mock blanket stitch
that looks pretty good.

Kay