Thanks everyone for all the replies! :muah:
wandaweberg, if you google the term "scrunchable scarf," the pattern will come up. Also, if you do a search on the "whatcha knitting" forum here on KH, you'll find some GORGEOUS :inlove: pics of others' scrunchable scarves.
Here's the pattern in a nutshell:
Cast on a multiple of 3 stitches, plus 2 extra.
On each row, slip the first stitch (as if to purl).
Then, the pattern is K2 P1 until you have one stitch left, which you knit.
Make it as long or as wide as you want!
Here's the link to the pattern: http://www.knitlist.com/96gift/giftsscarf.htm