I used to use Udderly Smooth hand cream when I did needlepoint. Never left any residue on the fabric.
(
http://www.drugstore.com/templates/b...20hand%20cream)
Something that's worked wonders on my dry cracked skin on my hands is the hot wax hand bath. It's like a mini spa treatment at home. You can buy them at Ben Bath and Beyond.
Good luck, and I hope your hands heal up quickly!!