Ashley, at Make it and Love it, gives a tutorial for the "Pleated Knit Scarf" found here. In it, she says that after you have worked with knit a few times, you'll learn to love the stuff.
I'm still waiting for that moment.
I've only tried sewing with knit a few times and it's still tricky. I bought a "jersey" needle for my machine and that helped. I think having a machine whose tension knob is merely a decoration doesn't help either.
I almost cheated today with the no-purchase rule. I ran out of gray thread a while ago and never bought more. I knew that my seams weren't going to be pretty and didn't want them to show up. I finally decided to keep to the rules of the game and used a dark gray/blue thread. I figured that would have to do.
The scarf is prettier when you put it on. The pleats sort of bulge out like ruffles. I just didn't want to take a picture of a gray scarf on my brown shirt and I was too lazy to change (or comb my hair). You can check out Ashley's scarf on her blog and see just how cute this scarf can be.