I use my iPhone for spiritual reading in the Adoration Chapel because my iPieta app has all my favourite spiritual books, and I don’t have to haul them around. There are some real busy-bodies who can’t handle it.
That being said, I would say that it is not a good idea to knit in the Adoration Chapel, in the same way that it is not appropriate for me to do my Theology homework in the Chapel. Further, prayer shawls aren’t actually a Catholic thing, but rather a Jewish thing. I know that there is a fad going on right now with Catholics and Jewish prayer shawls, but it is not appropriate for Catholics to use prayer shawls. That would be like a Jewish person using a priest’s confessional stole to pray. It’s not appropriate.
This was dealt with in the Ask an Apologist:
forums.catholic-questions.org/showthread.php?t=638072