First, thanks for all the suggestions from everyone. I like all the ideas I have heard. I think I will start with TwistKnit's swatch idea. I just tried some purling on my current scarf (which is quickly turning into a practice swatch that is scarf length) and I am having some troubles. I can't seem to get the needle through if I mix up purls with knits, the stitches are too tight. So, I think I need more practice before my next (first) scarf.
I also went and asked about some classes, looks like I am going to take one starting later this month. While there I picked up my 2nd set of needles; a wooden set size #7. I already have a set of size #9 so #8 seemed a bit close to what I already had. In addition I picked up some "Mountain Goat" hand painted yarn, I really like it. It is 55% mohair and 45% wool, 5st/inch/ 230 yards. It has a great changing color to it (called Firestorm). It is kind of spendy but I won't use it until I am ready. I got it at my LYS but here is an online link to the same stuff:
Now, the last question, What does everyone use for a knitting bag? Everything I look at is really geared towards woman. I have been using a big zip lock bag, but that is already getting too small. Any really neat ideas for portable bags out there? I am sure this crowd has come up with some very clever options.