We've been to the village of Teotitlan de Valle twice. This village is famous for its weaving, which is sold all over Oaxaca. Here's a particularly nice example:
Our first visit was in early July, when we went to visit Indigo's second grade teacher, who was visiting her family there. We saw a Guelaguetza parade, which I previously posted some video of. (I'd link to it if I could, but instead you'll just have to scroll down.)
The little girls also get into the act, but with smaller displays on their smaller heads.
Our second trip to Teotilan was in mid-August. We went particularly because they were having a fair and we wanted to buy some tapetes -- the woven wool rugs that Teotitlan is famous for.
We bought this tapete for Indigo -- it's an "Arbol de Vida," or Tree of Life, a very common image. She liked this one because it has lots of animals, including deer. All of the traditional patterns symbolize something.