I've seen lots of these mitten trees done - usually people use such colourful yarn that they look very festive. One thought I have it to use jingle balls - you can get them relatively inexpensively at any craft store and if you are going to use a piece of yarn to "tie" the mitts together, you could just string on a bell or two. The kids receiving the mitts would probably get a kick out of them too!
I've also seen clothes pins decorated like reindeer - these could be used to attach the mitts and scarves to the tree. I think there is a tutorial on the Michaels website to make them.
Good luck - it sounds like a great project. I like to contribute mitts to our tree here too!
Sarah
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