There are several different methods to create a piece of multi coloured knitting where you find more than one colour in a row. The most well known are fair-isle or stranded knitting technique, where the colour not being used is carried across the back of the fabric in 'strands'. It is also possible to create the effect of more than one colour in a row by using a slip stitch pattern which creates the multi-colour appearance but still knitting a row in only one colour, and finally Intarsia which makes a single thickness of fabric by using a separate source of yarn for each block of colour across the row, without stranding at the rear of the fabric.
The following You Tube video is for all of you who love Kaffe Fassett's many-coloured knitted art. Although the technical aspects of intarsia are not really addressed, the inspirational aspects of working with colour like a painter are clearly expressed and hopefully will enthuse you for your own vivid projects.
Intarsia is often used when there are lots of blocks of colour, as in a 'picture' knit, and depending on how many colours are used in the project you can use your yarns either direct from the balls, wrapped around little bobbins or wound up into 'butterflies', or, my own favourite as recommended by Kaffe Fassett, just lengths of yarn. Although it can look like a terrible tangle at the back, just grabbing the strand of yarn you want and pulling it gently through the others actually works really well and I find is far less likely to knot than the other methods, but that's just me. Almost every knitter will have their own favourite method for intarsia, but the essential thing is to ensure that the yarn is twisted around the yarn to which you are changing every time to avoid a little row of holes surrounding each intarsia block. The twisting process happens on every row, (remember intarsia fabrics are usually stocking stitch but you can incorporate texture if you want). On knit rows the two adjacent yarns are twisted on the purl side of the fabric to create a clear sharp boundary on the right side, whilst on the purl rows the twisting of the yarns at the edges of the colour blocks are kept on the purl side of the fabric.
Just check out this instructional video tutorial from an American designer who specialises in intarsia technique; it takes a while but really shows in depth how to create a beautifully tidy wrong side and a nice even tensioned right side piece of intarsia. Although only two colours are used in the video to make it easier to explain, you can of course use as many shades as you want in a row as long as each has their own separate yarn supply.