If you refer to the main photo, you will see the old method in green, and the Magic Ring in blue.
(Notice there's no hole in the middle of the Magic Ring).
To make the Magic Ring continue on to the next step.
For more crochet instructions, how to read patterns, choose tools & materials, and make a variety of stitches, read my Instructable on How to Crochet: Amigurumi Basics
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Signing UpStep 1: Making The Magic Ring: Steps 1 - 4
Step 1: Begin by wrapping the yarn around your fingers, like shown.
Step 2: Put your crochet hook through the center of the loops, like shown.
Step 3: Pull the yarn (that comes from the ball) through the center of the loops, like shown.
Step 4: Hook the yarn (that comes from the ball), like shown, and pull the yarn through the loop on the crochet hook.
The start of the Magic Ring should now look like Photo 2.
Proceed to the next step.






































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http://www.youtube.com/watch?v=FHYVutk2iYY
What you want to do is wrap the thread around your fingers (like shown in step 1) to make a large loop. Then insert your hook into the center of the large loop of yarn and pull the thread through, and then take the thread from the top and pull it through the yarn on your hook. Essentially, you are making a slip knot with the thread wrapped around your fingers.
The next step is to make a traditional single crochet as many times as your pattern indicates. Normally, a single crochet is done in a stitch. Consider the yarn looped around your fingers as one BIG stitch. On step 2 the images show you how to single crochet. When you've completed the number of single crochets as your pattern indicates, you'll have what looks like the image in step 3. Note that the single crochet stitches were done around the loop of yarn (that was on your fingers).
At this point, the only thing you need to do is grab the short yarn end and pull. It "magically" pulls your single crochets into a closed ring, and the center hole pretty much disappears. The advantage to that is when you're done your project, you don't have this unsightly hole.
If you still need help, please let me know.
Also, refer to my Instructable on How to Crochet: Amigurumi Basics.