I did this last year, and it worked out spendidly. Instead of not having anything for gifts ready for xmas, I even had about a month to do friend gifts!
Last year, i had just started socks, so I knit socks for my nana, mom, dad, grandpa and cousin. Then a bag for my other cousin, hat for my other grandpa, and knit santa hats ortaments for everyone else.
This year, I've finished my first gift:
(prolly for a cousin or sibling.)
(yes, i know i look out of it, b/c i'm on pain meds for my lack of wisdom teeth)
the pattern is the fingerless mitts from "weekend knitting". I was orginally disappointed with the book, but i now realize the amazing gift giving potential in the book.
(i also conveniently found out i am slightly allergic to alpaca! i can feel that it's soft, but after just taking the above pictures, I started to itch!)