*** Start Edit *** I put the beads on before I did the spool knitting ... as inspired by this post by Diane of Crafty Pod.  My beads have way-huge holes, so I used a needle to thread them  *** End Edit ***

Here is my spool knitter with just four, closely arranged nails.  This produces a tightly woven tube that, as Andrew noticed, closely resembles a shoelace. In the piece above, I placed a bead in every third "stitch."

I'm using size 3 crochet cotton in black and red glass beads that are painted silver on the inside.  The beads seem to glow, like little red LED lights.

For this piece, I put a bead in every other "stitch."  As you can probably see, the fabric of a spool knit tube kind of twists around subtly.

I'm going to make the top one into a bracelet ... once I get a clasp. :)

If you are interested in more about spool knitting, definitely check out this great blog by Marian, Spool Knitter.  She has all kinds of great info and vintage spool knitters.