Here is what I am using to make the cord for the bag handles:
It is a Pony French Knitter also called knitty knobby, knitting nancy, spool knitter…. The instructions that came with the thingummy weren’t too clear, but I found this excellent site with pictures and stuff.
Here is what the cord looks like. Magic, isn’t it?
Best of all, this toy is Made in India and for a change, it is actually available here. *clap vigorously* I got it for Rs 42 on my last trip to Hyderabad. (And yes, I do have rather a lot of lines on my palms.)
swakrta.com 
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December 16, 2005 at 6:17 pm
~drew emborsky~
Wow, that IS magic. I may have to find me one of those!
October 15, 2006 at 9:19 pm
Drew’s BigBottom « Where is she now?
[…] For the cord I used the Lobster stitch, and it is a bit too thick for the purpose, so I am now making the Parallel Chain cord found at the same tutorial for a thinner cord. The handle was supposed to be a knitted I-cord, but I cheated and used my trusty I-cord maker instead and whipped it up much faster than I would have on needles. […]