From Knitty:

I love stranded knitting but definitely dislike weaving the ends, so I came up these tams. They are worked in the round in what I call “beginner’s Fair Isle knitting”. Using a variegated yarn as the contrast color, you are able to achieve the effect of a more complicated Fair Isle pattern by using just the same two strands from cast on to bind off! Choose your favourite variegated worsted weight yarn (or simply some leftovers) for your own unique tams! They are quick to make and fun to knit.