Deborah Newton's Designing Knitwear is the bible. This is the book that can launch you into fame and fortune designing complicated works of art. The color chapter is excellent. I don't think she covers designing for kids though.
Maggie Righetti's Sweater Design in Plain English focuses completely on designing knitted sweaters for people THAT ACTUALLY LOOK GOOD AND FIT WELL. Maggie's style of writing is warm and chatty despite the fact that this book has more mathematical equations than a high school algebra textbook.
Janet Szabo's Handbook of Aran Sweater Design is like having a talented designer sit down next to you and talk you through it. Every time I think up a question (like "How do you seam saddle shoulders so they look good?") Janet manages to answer it.
The Knitter's Handy Book of Patterns offers templates for all sorts of simple sweaters and even better, accessories. I use this book often and it is quite handy. I guess I'd like more variety with this book and more info on how to change things.
My newest acquisition is Style Your Own Kid's Knits: Simply Choose a Pattern and Select a Motif by Kate Buller. This British book includes templates and patterns for each age range (from 3-6 months to 7-10 years) all done in Rowan Handknit cotton yarn. Doing a book like this all in the same yarn weight somewhat defeats the purpose but the book makes up for it in other ways. I really like the way this book uses detailed schematics (graphed out by stitch) for the sweaters. In the schematics they'll show different necklines or where to throw in colorful motifs. There are also pattern templates for two hats and two bags.
The Creative Library section of the book is what makes it shine and is well worth the price of the book. It offers a stitch library, decorative cast ons and lace edgings, letters and numbers, geometric patterns and plenty of wonderful pictures you can add in intarsia or duplicate stitch.
