I found this fantastically colorful & festive felt garland tutorial on Momtastic (I came upon the link via another blog, but I forgot which...sorry!) It sounds super easy to make. It is very similar to the paper garlands I made for my nephew's birthday last year. You just have to cut out a bunch of circles and slowly feed them through the sewing machine. Easy peasy! I really like how they coordinated the garland to the stockings.
Here are some more fabulous felt and dot garlands I found around the blogosphere:
A Curious George Inspired Birthday Party - My Bride Story
Twisted Felt Garland - Purl Bee
Felt Pom Pom Garland - Truly Smitten
Felt Garland - Style & Sensibility
Sticker Dot Garland - Martha Stewart