I live in a neighborhood full of little independent shops that I browse regularly. Lately it seems like everyone has summer sweaters and scarves made from ribbon, ladder, and other flat yarns. If you're thinking of DIYing this trend I've put together a few tips to help your projects turn out better.
Your needle size is everything with ribbon yarns. Bigger is better. If you knit with small needles you'll end up completely losing the ribbon effect - your project will look like it was knit with ordinary yarn. Large needles create rows that are large enough for the ribbon to lay out flat.
Knit with size 4 US needles - so small you lose the ribbon look completely.
This is knit with size 11 US needles and the ribbon look is much more obvious.
To really make the ribbon show, work several rows normally then work a row where you wrap the yarn one or more times around the needle between each stitch. On the return row let all of those extra yarn wraps drop. You can do this every other row, but your work will be much more stable if you work 3 or more plain rows between each pattern row. This is also probably the fastest way to knit.
Twisting and Untwisting the Yarn
Yarn is really just fibers twisted together. If you let your ribbon twist while you knit it will just look like ordinary yarn. Keeping the ribbon as flat as possible when wrapping it around the needle to maximize the ribbon.
You will then have to periodically untwist the yarn. The easiest way for me is to hold up the knitting by the skein of yarn I'm working from and let it untwist on it's own.
It's a good idea to slide all the stitches down before you hold it up to untwist unless you're really confident that your stitches won't fall off the end.