I've been working on this lacy scarf. It's crocheted, but you do use a giant knitting needle to make the open holes for the lace.
I ran across this video to learn how to do it. As well as this tutorial to deal with the curling issue (basically, she suggests adding one more row of single crochets to stabilize the series).
It's only 30 stitches for one row, so it didn't take long ... Still this little scarf took me about 2 months to make, as I'd do 1 or 2 rows every week or so. It seemed to help if the yarn sat on the knitting needle for at least a day to help shape it before going on to the next row.
I'd like to make more, but I'm having trouble locating some of these luscious variegated yarns at the local craft stores. They are all stocked for baby pinks and blues --- Eeesh!
The button is attached "shank-style" and then pushed through one of the lace holes.