The e-textile construction kit by [Leah Buechley] consists of stitch-able sensors and microcontrollers. Stitch-able refers to the fact that these parts can be sewn with a needle and thread into wearable clothing or other fabric-based housings. A paper (PDF) on the e-textile construction kit project contains the first version. The second version of the e-textile construction kit, the LilyPad Arduino, is available this month through SparkFun’s site. Especially interesting are her instructions for modifying the clock speed on the Arduino to make it suitable for battery powered wearables.
Update: [Leah] updated her site since we posted this and added this new how-to.