Straw Into Gold was a wonderful yarn shop in Berkeley, California. They lost their lease and no longer have a retail store. Their wholesale division, Crystal Palace Yarns, is still around, though.
Patternworks hass a yarn and goodies catalog published once a year. You can order online, too.
Quanah for Yarn does personal yarn shopping from Toronto, Canada
The Wooly West, based in Utah, sells patterns, books, yarns, and other knitting related items.
Fiber Trends, famous for their felted knit patterns, now has their own website. You can't buy the patterns directly from Fiber Trends, but you can find out which local stores carry them, and preview all the patterns.
San Francisco Bay Area yarn stores and events
Beth Brown-Reinsel's Knitting Traditions, an online knitting store
Halcyon Yarn
 Peace Fleece
Knitting books at Amazon.com
Lion Brand Yarn sells its own line of yarns, mainly acrylic or cotton blends, as well as patterns
 
 
 
  Here are some of the knitting books I really enjoy, either for the techniques, photos, history, or cool designs. Click on the picture to connect to Amazon.com and get more information. 

 This is not your mother's Learn to Knit guide. It's got the basics of knitting, online and offline resources, and several dozen patterns of varying complexity (including a PDA cozy and a bra and panty set!) I bought a copy for my sister, a new knitter, but then went out and bought another copy for myself!

History of Hand Knitting
  This is the book everyone's been waiting for! I haven't read my copy, yet. It's only a reprint of the first edition, and hasn't been updated in any way. Perhaps we'll see that in the third edition....

Socks Soar on Two Circular Needles
 I am knitting my second pair of socks based on the technique of using 2 circular needles. It really does work, and it might be a bit faster than using dpn's

No Idle Hands
 This is a great book if you are interested in the history of knitting in the United States. Because it is so easy today to go and buy pretty much any type of knitware one wants, it's interesting to read about times when this wasn't the case.

Knitting Without Tears
 Elizabeth Zimmerman's classic book. I also recommend her Knitters' Almanac.