I bought some felt from Cocoon in Brighton when visiting my son last week, with these Christmas ornaments in mind. The tutorial is excellent and easy to follow and can be found on the Art Threads blog which is one of my regular reads. They didn't take long to do for a totally amateurish embroiderer and apart from the felt everything else was available from my supplies.
Also to be found at Art Threads are some fantastic recycling and re-purposing ideas - I'm well impressed with what this lady does with charity shop finds.
Cocoon is small but beautiful with some lovely hand knitting yarns and ideas. There's also quite a lot of haberdashery in there too. Just round the corner from my son's new home so it's a nice place to wander when visiting.
Mum and I bought some very fancy yarn - more on that later - she is making much better progress than me as I haven't fathomed the instructions out yet. Watch this space!