I knit them! Blankets, sweaters, hats, socks, diaper covers (soakers), mittens, legwarmers. Knitpicks.com has some sturdy worsted for a good price: http://www.knitpicks.com/yarns/Wool_of_the_Andes_Worsted_Yarn__D5420103.html
I also often find sweaters in thrift stores, unravel and wash the wool, and use that to knit new items-- so cheap.
I've made puddle pads out of felted wool blankets from thrift stores, and sewn soakers from felted sweaters.
There's a learning curve to knitting, but youtube has tons of good tutorials if you don't have a real-life teacher, and it can be very satisfying to make something for your very own baby with your very own hands.
Follow Mothering