Using Homespun yarn for a simple rectangular garter stitch shawl was one of my first projects, and it was for my mother-in-law, an accomplished crocheter. That poor shawl had so many mistakes in it, I put it away to "finish another time when I got to be a little better knitter". There was NO WAY I was going to give something like that to my mother-in-law! I too found the Homespun very difficult to knit with at first--for me, it split a lot, and I knitted way too tightly at that time to have success. Another problem with tight knitting with the Homespun is that the strand you're working on tends to get bunched up, and you have to push that bunch down the skein throughout the whole skein--that is frustrating. But I knew that happened because I was a tight knitter, and I thought that working with a boucle yarn just meant I had to try to knit a little differently than a smoother yarn (say like a merino wool). So I figured that if I gave the Homespun another chance, I would try to be aware that I was knitting too tightly so I wouldn't cause the yarn to bunch up.
Anyway, I decided to give Homespun another try because I really liked the colors they had and the yarn was pretty nice and soft for being acrylic. I subsequently made three of the simple garter stitch rectangular shawls with it, but I had to knit VERY slowly with it until I began to understand how the yarn worked, and as I became a little more experienced knitter, I started knitting less tightly, too. After those three shawls were done, I made a few more shawls with the Homespun with great success, and now, when I make shawls as gifts for people (usually a garter stitch shawl, nothing fancy, because the boucle yarn doesn't show much detail for fancier stitches I've found--it's just a waste of time to go through all of that work and not have it show), it's pretty much the only yarn I use. I usually use a size 13 (9mm) needle with it (or a size 15 [10mm] if I'm working with two strands held together); as others have posted, I don't know if using a smaller needle would work very well (even though their gauge lists size 10 needle [6mm]). I find that the size 13 needle gives the shawl a really nice drape and that it's still VERY warm. And something else very nice about this yarn is that there is something to be said about being able to throw something in the washer and dryer--I haven't had to give the knitted shawls I've made out of Homespun any special care. I throw them in with my other laundry and they come out great. I can't testify as to how Homespun makes for garments, though, as I haven't knitted garments out of it. But it seems to take "a beating" pretty well and bounces back. Just one thing--I wouldn't use it for fringe, even if you knot it. The fringe looks kind of ratty after a few washes, in my humble opinion.
After several shawls later, I decided to go back to my mother-in-law's sorry excuse for a shawl I had started for her a year ago, and I unraveled the whole thing, and reknit it in a simple garter stitch triangular shape and crocheted some contrasting yarn onto the edges. I couldn't have been more pleased about how it turned out, and I felt it was worth me putting it away until I was a little bit more confident working with it.
I don't know about everyone--I'm inclined to believe that if I can knit with something, ANYBODY can, because I'm not a great knitter--but I would say that if someone really wants to knit with the Homespun, I believe the key is just to knit very slowly (even painfully slowly!) and try to knit loosely. I found that the little threads that make the Homespun a boucle yarn are usually what wound up causing the yarn to split and "catch" so it required some really slow knitting when I first started using it and getting used to it to make sure these aren't getting caught.
There's an article at knitty that was helpful to me to realize how I could knit a little bit looser; maybe it can help somebody else:
If you still would like to try to find a substitute yarn, you might want to try Hobby Lobby's brand of yarn that is similar; the brand is "Yarn Bee", and the type of yarn is "Fleece Lite". The problem is that I find it's kind of pricey and the colors are more limited than Homespun, and the Fleece Lite colors are more bolder and not as soft as the Homespun. To be truthful, I like knitting with the Homespun better than the Fleece Lite. I haven't washed the Fleece Lite yet because I'm still knitting the shawl I'm making out of it. I also bought some Bernat "Soft Boucle" to start another shawl--I haven't knit with it yet, but it was a better value than Homespun (cheaper per skein, plus you get more yarn). I haven't tried it yet so I can't say one way or another what it's like.
Maybe all boucle yarns will be difficult to knit with because of that little thread that bunches up the yarn to give it that bumpy effect? :shrug:
Anyway, Knit Picks has a couple of boucle yarns: "Twist" and "Quarry" and "Spinnaker" if you'd like to try theirs. Good luck!