From Baby Center:
This week your baby weighs a little over 4 pounds (heft a pineapple) and has passed the 17-inch mark. He's rapidly losing that wrinkled, alien look and his skeleton is hardening. The bones in his skull aren't fused together, which allows them to move and slightly overlap, thus making it easier for him to fit through the birth canal. (The pressure on the head during birth is so intense that many babies are born with a conehead-like appearance.) These bones don't entirely fuse until early adulthood, so they can grow as his brain and other tissue expands during infancy.
From Giggle Glow:
In preparation for life on the outside, more fat is accumulating under your baby's skin, which makes it less transparent, and therefore less red. The skin is also growing softer and smoother as your baby plumps up. In the meantime, babies often start developing their sucking skills right about now and practice on their thumbs or fingers in anticipation of many happy mealtimes to come!