I am a knitting a shawl with 3 different types of alpaca yarn at the moment. I completely agree with Knitgal, knit it on bamboo needles (I am using big pins for my project and the needles are plastic which seems to work fine as it does not slide off).
It is an incredibly soft and warm yarn, and knits up really quick (I esp love that it leaves my fingers all soft after knitting!). It is very rewarding as you get such an instant result.
I have also found that it does not like being knitted up too tightly and it is not a sturdy yarn (ie does not hold its shape very easily).