In her book, "Getting Started Knitting Socks", (pg. 80) Ann Budd talks about "Magic Ball" Socks. There is a picture of striped socks she knitted from a ball containing 5 different yarns, and they're beautiful! She fuses random lengths of the various colors together to get unique yarn for unique socks. The whole procedure is described in the book - which, by the way, is an incredible book!
Yes, I'm becoming a sock-a-holic, too!
And I LOVE the little teddy!