KnitPro

knitPro is a free web application that translates digital images into knit, crochet, needlepoint and cross-stitch patterns. Simply upload jpeg, gif or png images and knitPro will generate a graph sizable for any fiber project. knitPro digitally mimics the tradition of pre-industrial craft circles who freely shared patterns and passed them down from generation to generation.

http://www.microrevolt.org/knitPro_intro.htm