Absolute beginners
Question from a buried comment: what's a good first project for a knitting lesson?
Yarn Harlot recommends hats as a first project: you can make one as easily as a scarf, but quicker. Nobody will finish one in the first session, but they'll get well on their way. In fact you don't have to decide whether to make a scarf or hat when you start — so if some knitters are going really well and want to keep on knitting, they can make a good long scarf between sessions; others may just get enough knitting to go round their heads, and in the second session you can show them how to cast off and finish it off.
The recommended scarf-into-hat method can be found in the delightful book Knitting Rules. I'll respect Stephanie's copyright and not go into it here.
The problem with this, of course, is that knitters in particularly warm climates might not be convinced that a wobbly woolly hat is quite what their wardrobe requires...
Another suggestion would be to make a very simple, small bag — just knit a rectangle the width you want your bag to be; fold it twice along the length so that there's a flap over the top; and choose something to make a long handle (running from one side of the base, up the side seam, over your shoulder and down to the other base point). Can be even quicker than a hat, but you need to have a plan for the strap; either buy a piece of leather or sturdy fabric, make an I-cord or knit a long, narrow strip. Remember to take the width of your strap into account when you're calculating the length of the bag. I've had good results with a cabled strap, it looks cute and also adds a bit of structure to the fabric.
If you allow enough length for the flap to hang down comfortably by itself, you don't need a fastening, but this is a good opportunity to try some embellishments and maybe learn some basic crochet techniques — do a row along the bottom of the flap, including a short buttonhole loop, and sew a button on. There's lots of room for everyone to decorate their bags in different ways when they're done, should they wish to; beading, embroidery, crochet flowers... but a plain bag in a pretty yarn will work all by itself.
Points to remember if making a bag: you want a sturdy fabric, so this will work best with chunky-ish yarn worked on smaller needles than usually recommended. Don't use garter stitch, it will stretch vertically; rib is probably fine but stocking stitch is best. Felting works really well but you'd have to wash the swatch first to see how much it shrinks, which presents problems for a first lesson.
Anyone else have suggestions?