Here's another of the projects from Kids Knitting by Melanie Falick. I'd never thought of making my own knitting needles before, but it's very simple and fun. They're fun to use as well.
I can recommend the book as it is full of quick funky knitting projects like this. But there are instructions for making your own knitting needles on various websites.
6-year-old Sam helped me make these, and it has inspired him to learn to knit. With the aid of Falick's book he is making good progress, knitting a bean-bag on the needles he made himself.