I'm not sure exactly what you saw. But...I was playing around with patterns last week and tried one called double knitting. When you are at the length you want, if you place every other stitch on a different needle it separates the front from the back and makes a sack. Was it something like this?
I made a clothespin bag using this technique and will take pictures tonight and post here. If this is the type of knitting you're wondering about I can post how I did it.