Links

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Craftster: ‘Rock is dead. Long live paper and scissors.’ I heart Craftster.
KnittingHelp: Step-by-step videos that explain all sort of stuff about knitting, from the most basic to the much more complex. I have used this site a LOT.
Knitty: Free online knitting magazine. Original, interesting patterns (free! and at all skill levels) and excellent articles, provided with regularity and on time. Amy Singer rocks.
Ravelry: A community of knitters, crocheters, dyers, spinners, and other yarny people. Contains the most amazing pattern database and provides a plethora of tools for keeping your knitting/crocheting/whatever organised and documented. Also, come and discover the community-wide love of Jess, Casey, and—perhaps most intensely—Bob.

Distributed Proofreaders: DP proofs e-books for Project Gutenberg. That is, the volunteers take scanned images of pages from eligible books, run them through a program that creates text files, compare the text to the scan to check for mistakes, and format the proofread pages into an e-book. (That's simplified, but that's the gist of it.) It's easy, it's fun, and it's satisfying; come join us!
The Internet Movie Database: Because everybody loves IMDb.
LibriVox: Like Project Gutenberg, but with audiobooks.
Penpal International: Like corresponding with people through e-mail, snailmail, or both? I lurrrve snailmail, and I have good friends from PPI.
Project Gutenberg: Thousands of free e-books. Lovelovelove.
Wikipedia: You can find information about almost anything here. Don't miss Wikimedia's other projects (Wikibooks, Wikiquote, Wikiversity, etc.).