This is gift art of Gem the Squirrel (i.e. toddlergirl) cuddling her favorite plushie, Grub, who is a worm or perhaps a caterpillar. Good old Grub, always happy and optimistic! :)
I did the character line art in Paint Tool SAI and everything else in GIMP for Painters (gimp-paint). In September, 2011, when I drew this, I was just way more used to GIMP than SAI.