My sister Gretchen and I set up an Etsy shop in January of this year. We're thinking about getting an occasional space at the local Farmers' Market, and doing some local holiday markets/sales. We'll both be offering items for sale at the CU Spinners and Weavers Guild Annual Show and Sale (November 2 & 3, 2012), as well.
As for my patterns, I've been selling them wholesale through a very limited number of yarn shops for more than 12 years. As you can see, my pattern website hasn't been updated in six of those years. ( It's on my list. Really.)
I have a number of free patterns, too, which are available as pdf downloads here.
Clearly, I don't work at this very hard. And I don't want to work at it very hard, to be honest. My heart and soul are in the creating, not the business logistics. I have no desire to submit designs to magazines or yarn companies. If they come to me, fine. I want to be in complete control.
So I'm converting all my paid patterns to pdfs and will sell them through Ravelry. Ravelry allows for direct sales to individuals, either through their home computers or via their in-store sales program. Payment is handled through Paypal, with which I've had good experiences.
Pattern pdfs can also be sold on craftsy.com and etsy.com, but the audiences there are much more diverse, and less focused on knitting -- and more likely to erroneously think they're buying a knitted hat, rather than the pattern to make a knitted hat, according to what I've heard. Ravelry pattern sales are automatically targeted at people who know how to knit (or crochet) and understand what "pattern" means.
I will probably investigate Patternfish as well - it's another targeted pattern-distribution site. But one (or two) things at a time.
It's beastly hot here, and dry, and has been for some time. I am so appreciative of air conditioning and ceiling fans!