what to do with the yarn i bought

On Saturday Melbourne had its version of the Zombie shuffle. Its the third time ive done the zombie shuffle. Its so much fun to get gored up and walk around the city with hundreds of others for two hours.
Its particularly therapeutic for someone like me who wears a three piece suit just to go to the supermarket!
I went as Bob Dylan this year. photo here if you're interested: http://img294.imageshack.us/img294/8554/n5795283166788105492ra0.jpg
and i found an alleyway to reinact a bit of the film clip.

anyway, i bought some yarn that i had plans for and now find i cant do what i wanted with it.
I wanted to knit a simple seed stitch scarf with it, but its felted lambswool and its all bumpy so doing seed stitch makes it look horribly ugly.
What's a good stitch to use that will bring out the light and shade of colour [cobalt blue! harrah!] and still look tidy?