I ran into this wreath in a BHG slideshow of outdoor decorating ideas (incidentally, the spider wreath at that link is pretty neat too). Their method involves wrapping styrofoam balls in yarn and then hot-gluing them to a wire wreath form, which strikes me as overly complicated.

An even easier approach would to be to bend some wire (such as from a coathanger) into a circle and thread balls of yarn onto it. Tape the ends of the wire together and cover the join with a pretty ribbon.

If you’re a crafter you probably have leftover yarn laying around which would be perfect for this project. It’d be easy to make several of these as gifts, and the construction is simple enough that kids could help out.

A wall full of wreaths might be an attractive way to store yarn as well; it’d be out of the way and you could find the color you need at a glance.