Have you seen the Martha Stewart "Craft a Day" site? Every day you get instructions on how to make a cool project. The one in the picture above shows how to embroider with raffia. I love the retro summery design!
You can also read comments people leave about the craft. About this bag, one reader said she had trouble with her raffia breaking. My hunch is the synthetic stuff would be more durable than natural raffia, and it comes in lots of cool colors.