Who's the craft auction geared toward? College age, the surrounding community (meaning all ages - little kids through adults), other groups? If you've geared it toward the whole community, if you can find some knit animal patterns, kids always LOVE stuffed animals....and then you can do little sweaters and stuff to go on them. I know I've beat this horse to death, but I'm doing little bags ("Knitted Pouch" by Janelle Schlossman) for goodie bags for my upcoming class reunion. There're pretty small - just enough for some little items - but do them up in the school colors, find a little knick-knack (you can find all kinds of little things like little charms, inexpensive chains, etc.) to put in them, put them for sale as a "grab bag" type thing.
Also, there's always the dishcloths, hair scrunchies, scarves, etc.