Yum! I just knit a scarf out of this. In hank form it was SO soft, seriously like clouds. It feels like it'll just fall apart in your hands. It is true that alpaca is weighter than wool and it is significantly less elastic than wool (if you stretch it chances are it won't return to its original shape, but it'll be close)--I guess the softness makes up for that. Here's a picture:
The only thing I didn't like about knitting with it... actually, I hated this aspect of the yarn: it shed like crazy. There were fibers everywhere. On my keyboard, on my clothes, in my nose, in my mouth, floating in the air... it was not cool.
The shedding seems to have significantly decreased though now that the scarf is all knitted up and finished. It's getting a bit fuzzy but it still looks good.
One close up for the road:
Even though this yarn is stunning, Malabrigo is still my all-time favorite yarn.