Watching crias playing is the most fun part of being an alpaca owner.  In second, at least in my opinion, is working with the fiber.  These are some of the sites I have found related to fiber - from shearing to the finished product.  In no particular order.

http://www.handspinning.com/lollipops/spininst.htm- Using a drop spindles is an inexpensive way to sping up your fleece.  I started out with a top whorl spindle, and this site has instructions on how to use one.  Drop spindles take a bit to get used to, and it is something I am still working on.  Many experts recommend becoming proficient with one before moving on to a wheel.

http://www.mielkesfarm.com/spndl_inst.htm- more information on drop spindle use, and a detailed description of drafting the fiber, getting if off the spindle and making it into a plied yarn

http://www.joyofhandspinning.com/- this is by far the most complete site I have found regarding spinning.  I have found the videos to be especially helpful. 

http://www.kbbspin.org/- this is a site where weavers, spinners and knitters buy and sell just about everything they need for their art.  Classified ads, want ads, forums, and the owners blog.  Good reading.

http://www.thepiper.com/fiberart/koolaid/basic-howto.html- has information on how to use Kool-Aid to dye fiber. 


Once you have produced the yarn, here are some sites to help you learn to knit, or improve your technique...

http://www.knittinghelp.com/- I used this site to teach myself to knit.  The videos are detailed and easy to follow.

http://www.diynetwork.com/diy/na_knitting/0,2024,DIY_14141,00.html - I am a big fan of the DIY Network show, "Knitty Gritty".  This is the index from the Knitting page on the Do It Yourself Network web site.  Tons and tons of knitting related links (with many videos of their shows), and other crafty subjects.

And here are some felting sites.  There are several ways to make felt - the links sound repetitious, but they are for different methods. 

http://www.bbc.co.uk/dna/h2g2/A633052- working the felt with your hands.

http://www.hatshapers.com/Felting_Instructions.htm- this site describes how to make felted hats. 

http://www.cottageschool.tas.edu.au/biggies/felt-00-contents.html- this site has some good scarf making suggestions, and soaks the felt in the bathtub.  I personally haven't tried this method, but probably will when I start making large projects.

http://www.allfiberarts.com/library/howto/ht00/how_felt.htm- another site with instructions for making felt in the bathtub.  Its also has some fun felt projects here.