I've dyed a few of my wool knitting projects with kool aid. It does dye really well, it's unbelievable (although I wouldn't recommend actually drinking it ;-) So far, the two things I've dyed haven't come out well. The first, I tye dye'd and it just came out looking kinda weird. The second, I dipped in the dye and it bled onto the other color. The two colors were purple and green, so it made kind of a brownish color where they meet. I decided this time to dye the yarn before I made something with it. There are many instructions online for dying with kool aid but the easiest way for me was to fill a pot with water, place my kool aid in, put in my yarn (which I tied up cause I was going for a patterned kind of look), boiled it for about 10 minutes, let cool, dried, and voila! Brilliant but safe colors. I first dyed with the darker colors then moved up to lighter. You'll know if it's done when the water is clear. If the color is not brilliant enough, just add more kool aid.
For this one I used black cherry, then cherry, then orange.
For the next one, I used grape and blue raspberry kool aid.
For this one, I used lime and lemonade kool aid.