Here is another of my favorite children's books with textile themes. Ursula K. Le Guin's (yes, the one of SciFi fame) A Ride on the Red Mare's Back is a wonderful tale of a girl from the snowy north who takes a journey to rescue her little brother who has been stolen away by trolls. She is aided by a magical wooden horse toy, and ultimately she rescues her brother with the red scarf she has lovingly knit for him as her first knitting project. The watercolor illustrations by Julie Downing are absolutely beautiful. My copy is signed by the illustrator, who added this little horse drawing. 
