Those calendars of kittens playing with balls of yarn are cute, but don't let that give you the impression that cats should be playing with yarn... at least not by themselves.
A string-based cat toy should not be used by kitty without your supervision, as many cats will chew on string (or yarn) and swallow it, causing severe digestive tract damage. If it causes a stricture of the intestine, it could mean a painful death.
Cats and kittens love to chase stringy things, though, and it is generally safe to use them for play time. Just put those toys away when you are not present. After all, when cats play in the wild, their "toys" aren't always present, so don't feel you're hurting their feelings by taking them away. It's OK to leave the little fake mice out, or a ball, however.
They also tend to enjoy furry things, such as fluffy bedroom slippers, so if your cat is attacking yours, try to find a fluffy toy for her instead, unless you don't mind your slippers getting a little chewed up.
One of the purposes of cat play time in nature is to teach the young ones some living and survival skills, such as hunting and how to dispatch the prey once caught. It also may teach them how to get along with other cats and how to exert their dominance when needed. These skills may not be learned correctly if you bring home a kitten and use your own playtime methods instead.
For example, in the wild, catching a small rodent requires attention to the tiniest movements and sounds. So you might try tantalizing your little lion with a ball tied to some string, which you gently jiggle behind a chair or table leg, and let kitty attack it when she's ready to pounce. Jerk it away as she approaches, since a mouse would attempt to run away at the last moment, and kitty will learn the art of pursuit while developing quick reflexes.
To help her gain confidence as her skills improve, be sure to let her catch it often enough to encourage her.
You also might try lifting the ball into the air quickly to give her a chance to leap into the air, as if going for a bird. This type of play also helps a cat develop strong muscles and coordination.
Cats also enjoy reaching into things to grasp and remove something. This may come from a hunting instinct also, such as reaching for a small animal in a burrow. This skill can be honed by providing a toy that uses the principle of reaching and grasping, such as a box with holes in it just large enough for the cat's paw and arm, but too small to crawl into. Put fun items into the box for kitty to discover and recover.
Climbing is a natural activity for cats, too, so instead of yelling at the cat for climbing the drapes, it's a good idea to provide something you approve of, such as a cat tree or a tall scratching post. Maybe they will leave the drapes alone...
Lastly, a word of caution: Never use your hands for play. Always and only use a toy. Your hand should represent affection and comfort, so only use your hands for gentle handling and petting. If you allow your cat to play-attack your hands, or feet, you are only helping your cat to become a biter. This is never acceptable, and could lead to some serious injury when the cat becomes a large adult.
If your kitten or cat does attack your hand during play, don't yell or jerk back. This actually excites the hunting instinct, since you're acting like prey at that moment. Instead, freeze. Glare at the cat, and speak sharply, "No!" or, "Ouch!" When he lets go and looks at you quizzically, just ignore him and calmly do something else (such as leaving the room to get a bandaid!). Give him at least 5 minutes to also calm down before you begin a new play session.
For more information about solving cat behavior problems, visit Dr. Peters' web site: http://www.theproblemcat.com/faq.html