Washcloths and dishcloths and hotpads are really fun projects to knit, both because they are small and because they are a great way to try new techniques (also, having something you made that you can use every day is pretty cool, too).
The Water Lily pattern from Knitting and So On is a great option because in addition to being a fun, small project with some great techniques in it (short rows and changing colors), it also comes out a really fun shape, not your regular square or rectangle.
I love the idea of knitting a pair and using them as hot pads. I also like the idea of blowing this project up to a shawl size. Either way it looks like lots of fun.
[Photo: Knitting and So On.]
While no one would likely use a knit backpack for school, knitting a backpack is a fun way to show off your knitting skills and carry around your project or everyday essentials instead of using a purse. Check out these cute backpack knitting patterns and stitch one up for your next project.