I've been working with my son and teaching him how to knit... I found it better to sit on the couch - I sat behind him and he sat between my knees - that way I could put my arms around and in front and show/guide him as I was teaching him. I also showed him the videos from this site and from Cyberseams: http://cyberseams.com/how_to_cyberse...0and%20methods
I actually started him with knitting swatches - in garter stitch. The other day I showed him purl. His first project that he wants to do is a scarf.
I have seen on this site in on other threads that other knitters have recommended dish cloths as a great way to try different stitchs, patterns, etc.. when learning to knit.