I made this bag last month and I'm still trying to figure out what to do with it. It's knit with Noro Kureyon and hand felted in my sink. I knit it in the round and attempted a three needle bind off, but forgot to turn it inside out, so now the seam is on the outside. It actually looks okay, though.
While the Kureyon is heavenly to knit with and looks awesome felted, it didn't felt up terribly thick. I need to either felt it again or line it. And then I was thinking of using these gorgeous Grayson E small rolled leather purse handles.
It's the perfect size for a laptop case, and also works well as a cat bed ... here are a couple pictures of the little black kitty settling in for a snooze on top of it.