I know everyone is already aware that you can find some commonly used model supplies in the craft stores; haven''t seen this source mentioned. The other day I was on evilbay did a search on flocking. Came up with quite a few hits from both model supplies and craft supplies catagories. Looked at the model flocking first hoping that there would be some cheaper than hobby shop prices, they were almost all the same. On to the craft stuff, there were a whole lot of the Martha Stewart at higher prices than the model stuff, then there were the bulk baggies of flocking at $2 for 1 ounce.
Long story short. I ordered four of the baggies of the craft flocking and was pleasently surprised to find that this is the exact same type of flocking a lot of us use to represent carpeting in our model interiors. The other plus is that there are a wider variety of colors than the usual gray, black... that you see in the hobby shop. Not to mention that you are getting like 4 or 5 times the material at half the price.
If you do go this route and buy multiple bags make sure you ask the seller for combined shipping the seller that I bought from combined 4 bags for the price of 1 shipping, further savings.
(The only drawback was that my wife is now dissapointed. She was going to get th flocking for scrapbooking if it wasn't the same stuff as used for modeling. Hmmm maybe not, maybe I can convince her to buy some and borrow it!!)
Note: I didn't supply cool pictures because nearly everyone knows what flocking and baggies look like.