I know this has been posted a while back, but I just shared this info with a co-worker wanting to learn how to knit. I know there are tons of sites that give you great illustrations, but these two sites have videos which are really informative.
Stitch Guide has great Quicktimes so you can play them over and over and knit (or purl) along.
Also worth checking out is: Common Threads which has Real Player lessons on knitting basics.