Have you tried needle felting yet? The silly-looking bear and the heart on the right are both needle felted.
Described simply, needle felting is stabbing through fibers repeatedly with a barbed needle. Doing this causes the fibers to hook together to create a fabric of sorts.
Wool roving or felt pieces can be needle felted on knitted garments, felt, fleece or other fabrics. Fashion items like hats, purses, sweaters and scarves can be decorated with needle felting. Clever artists needle felt imaginative dimensional pieces such as dolls, toys, ornaments and jewelry.
To find out more, check out these links: The Silver Penny and Craftlog have how-to's, Clover has some great needle felting tools, National Nonwovens has luscious colors of wool felts and Wool Wisps (roving) for needle felting, C & T Publishing has needle felting books.