I think I'll start a running thread of my favorite NYC stores... worth a stop if you're in town...
359 Broadway (2 blocks So. of Canal)
I found burlap and linen canvas suitable for rug backings there! Yay! I also found a bargain box of embroidery wool. Good prices.
1008 6th Avenue
I swear they have everything imaginable in the universe. Buttons and trimmings galore.
Annie & Company Needlepoint
1325 Madison Ave (Btwn 93rd and 94th)
I went there for the first time today. Knitting downstairs, needlepoint upstairs. Very friendly and helpful, tons of canvases and tons of yarn, floss, silk. I didn't check out the 1st floor knitting store but it looks chock full of absolutely yummy yarns.