The swatch on the right was knit flat, which means I knitted on the RS and purled on the WS. It measures 3.5 sts and 5.25 rows per inch.
The swatch on the left is knitted in the round, which means I knitted all rows. It measures 3.5 sts and 5 rows per inch.
Since the hat is knitted in the round, the swatch in the round is giving me the truest rows per inch, and I can thus accurately determine how tall my hat will be with the pattern as written, and then determine if I want to make any adjustments.
If knitting a swatch in the round is one thing too many for you to deal with, go ahead and knit it flat. I’d rather you did that than no swatch at all! (Shhh, don’t tell Pam…)
If you want to try knitting a swatch in the round, it’s quite simple.
Using your circular needle, cast on 6 inches worth of stitches. Knit the first row. Then slide your stitches to the other end of your circular needle, carry the yarn loosely across the end and with RS facing go ahead and knit the next row. When your finished, you can cut the strands on the back so that the swatch lies flat.