Funny how something so simple has so many solutions. What we typically do: one blanket to completely cover the isolette mattress like a sheet, edges folded under. Second blanket, slightly smaller, to place baby on. We use cloth diapers to roll up for barriers- one for each side, 1 at the feet- and place those under the second blanket to make a little baby nest. We fold a cloth diaper in half and place under the baby's head (babies <34 weeks get a gel pillow, we place that inside the folded cloth diaper "pillowcase").
We neaten up the edges of the second blanket however we can, so the diaper rolls can't be seen usually, but most importantly however is necessary to position the baby properly. Sometimes instead of diaper rolls I'll roll a regular receiving blanket into a roll and use that for the nest. Sometimes I add more diaper rolls on one side or the other. It all depends on the baby.
We can get really competitive about our beds, though, lol- it's kind of a running joke. The standard issue hospital receiving blankets are white with bunnies. Once the baby is stabilized (or stable enough) and clean, we usually change the blankets to something cute and matching, or at least clean bunny blankets is the nice blankets are all in the laundry (sometimes happens on the weekends). And a pox is wished on any nurse silly enough to make a bed with the bunnies facing the "wrong" way or with unmatching blankets, lol. Some people truely can't get through the shift without changing the bed if the bunnies are in the wrong direction! I think the NICU attracts a lot of us with little OCD traits, like that