So I hunted down the original article in my Winter 2002 issue of Spin-Off and did a scan. This is what the texture looks like using seed stitch. Don't they look almost woven? The article says you can use any reversible stitch pattern and again the scarves are knit lengthwise with a different yarn each row with long tails to knot the fringe at each end. The Kool Aid scarf I showed yesterday was indeed done in garter stitch as Laurie astutely noted. I knit most of mine more loosely (out of sheer laziness) so they did have more of a lacy look.
I am going to do a purple version once I hunt down enough yarns. I have some Knitpicks' Gloss which I'm planning to use to make my scarf nice and shiny. I also think I'll use my twisted cast on because it is imperative you use a really loose cast on (or you won't get a straight scarf) and that cast on is much looser than my traditional long tail cast on. It really is a perfect project if you have a lot of leftover yarns from stranded color knitting or if you have a lot of handspun or hand-dyed yarns.