In an attempt to find new ways to make fun, salable items out of small amounts of scrap wool that I would normally just throw away, I've recently taken up a new craft: Needle-felting.
To do needle felting, you just get a lump of wool and poke it repeatedly with this barbed needle, and the wool magically felts.
It's really cool---you can do amazingly precise flat things like this:
Here's my first attempt at needle felting: a little Icelandic ewe. She is 100% raw, unwashed Icelandic wool throughout, except for her 2 beads for eyes and her bell on a ribbon. Her body, head, neck, and legs are felted hard, and then soft loose wool is applied like hair over that to give her a fluffy fleece. Because I used unwashed wool, she even smells like a sheep!