That's the booklet I learned from, back in the 50's! Published by Coats & Clark, I think. I bought it with my allowance -- it was about fifty cents then. You can still find it on eBay (for considerably more.) I taught myself to knit and crochet from it, but never found tatting particularly compelling.
Pixi Stix --
A couple of suggestions. It's good to learn a variety of stitches, but knitting is about a lot more. You'll learn better and faster if you have a good general reference book at hand. If you want to stay with the small, spiral-bound format, look at "A Knitter's Companion" by Vickie Square. It's got all the basics of shaping, increasing, decreasing, finishing, etc. Great little book. If you want to go for the best and most complete, invest in A Knitter's Handbook by Montse Stanley or Vogue Knitting.
Nothing wrong with cotton; you can do great things with it, but do try wool. You don't have to spend a bundle for good quality: ask your LYS about Cascade 220, Lamb's Pride or Plymouth Galway. Or check the KnitPicks.com catalogue, where we're talking $1.99 a skein for Wool of the Andes. The thing about wool is that it's elastic, so it's more forgiving and your knitting looks much more professional. It's also a pleasure to knit with. You're investing time and effort in learning to knit -- might as well enjoy it!