I have done a double knit bag that was felted afterwards, if you go to my Ravelry projects page, it is the pirate queen booty bag. (TrunkFullOYarn).
it is very easy to switch colors, just make sure you move both strands in between your needles when switching from knit to purl.
if you do go to Ravelry and look at the pattern from my projects, there are pretty good instructions there, then I came here and watched a quick video on it!
Good luck, it was a blast to knit