My friend JennGM asked me the other day about easy how-to knit books for her to recommend to family members. Here's what I suggested:
The Knitting School, translated from Italian and published by Sterling. This is a great, all purpose how-to with nice clean drawings and clear and concise directions. It goes beyond the basics, so will grow with the knitter's level of expertise.
Another great one is Montse Stanley's Knitter's Handbook. This is a wonderful general knitting reference to have on your shelf. Don't be fooled by the fact that it's published by Reader's Digest -- it's worth every penny.
A fun one to read, although better if you've got some knitting experience is the classic Elizabeth Zimmermann book, Knitting Without Tears. This is the book that caused me to really take off with my knitting when I was little. You really are "freed" to do what you want after reading Zimmermann's prose.
Let me know if you want any other book suggestions; next to knitting, reading about knitting is my favorite thing!