I've received a few inquiries regarding how I made the decorative ties on the Iceland Hat. And I'm not surprised: I think they add a particularly homey, festive touch. As with buttons, frog closures, etc, I think there's something very attractive about being invited, visually, to understand the way things go together.
And this particular cord is a favorite of mine. Made out of four strands and two colors, this braid riffs on the look of stockinette stitch by creating a column of nested V's in alternate colors. I think this would work particularly well as a complement to Nordic-style mittens or hats worked with knitted two-colored braids.
So without further ado, here is a brief tutorial! (Excuse the blurry photos; I'll try to have better soon).
For cords attached directly to the tassels, start with two strands of yarn, in Color A and Color B, each strand about 2.6 times the desired length of the braid. With a tapestry needle, thread the strands underneath the anchor string at the top of the tassel.
Pull the strands through halfway, so that each of the four ends is the same length (and consider tying an overhand knot for neatness and durability). Arrange the strands so their colors are ordered "A, B, B, A".
Create the braid using the following two steps:
1) Cross the right-most strand over its left-hand neighbor.
2) Cross the left-most strand over its two right-hand neighbors.
Properly executed, the strands moved in 1) and 2) should always be the same color, and at the end of the repeat the two strands should be crossed in the middle.
For additional clarity, here's a horrible MSPaint diagram. Good luck!