Yep. It's true. Knitting in the round scares the crap outta me.
I have only knit a couple of hats in the round and they weren't really pretty. Wish I had (not) pictures to share. There is always a gap thing going on at least on the first 3-4 rows. I don't really know why and I don't like it. Really. I'd just rather knit flat and sew the sumbitch. Ok, so I said it.
But....there is this sweater that I really love. http://shop.interweave.com/store/popup.htm?images/Gathered_Pullover_L.jpg But it's done in the round. And the freaking gauge is in the round. What does that mean? Oy! But, I think the yarn pictured above would work really well. It is Plain and Fancy wool sport. It's so soft and squishy. I just love it. And I have swatched with it. Just not in the frickin' round! http://www.ravelry.com/people/wendydancer/stash/sport
Fortunately,I still have the VLT scarf to keep me occupied...and I am loving it right now. I'm in the groove on the last border and it's like magic the way that border attaches and becomes one with the scarf. Who comes up with this stuff? I'm willing to bet that no one has thought up an original knitting idea in....forever!