I just stumbled across the Knitting Pattern Central website. It is a collection of free patterns found all over the Internet. A number of them come from Knitty and Mag Knits as well as blogs and other websites. The directory is divided into different categories and some of those are divided into subcategories. I love it's organization, must be a librarian thing. If you crochet, they have another site called Crochet Pattern Central. It has the same type of organization.
Anyway, I found a felted purse pattern that I am going to make as a thank you gift for someone. I might just have to make one for myself, too! Also found a pattern for some jewelry that would make a great gift for someone else. Again, I might have to make some for myself.