I've done a fair amount of dyeing of self-patterning yarns, either a faux-fair isle or just 3-color bands, and have considered doing more (like a 6-color-band-rainbow). Since I mostly knit socks on sock machines, it's a "fixed" process -- because the information I use is how much yarn it takes to knit one round on a cylinder, which turns out to be about 30 inches.
The picture at the top shows: commercially-dyed self-striping sock yarn; hand-dyed in a skein, 6" lengths of color banded across; and dyed-as-described-here yarn, though I used 2 solid colors rather than dots on the smaller burgundy band. These were all knit on my circular sock machine. There's a fair isle-style sock shown below, keep reading!
So, if you're knitting with sock yarns on something between 60 and 72 stitches, the 30 inch measure may be about right for you, too.
I have a "wrapping board" that I had made by a friend's husband, but could see using a warping board with several pegs on it for this, too, as long as you could adjust them to be either 15" apart (like my wrapping board) or 30" apart.
With the pegs 15" apart, one wrap around a pair of pegs 15" apart equals one trip around the sock.
So, I have 3 rows of pegs, each row with 2 pegs 15" apart. Each row is about 2" below the row above it. (Note: these are purchasable too, I found one online here.)
Here's what I did for fair isle:
* Wrap the top pair 8 times.
Then come around the outside and wrap the middle pair twice.
Then come around the outside and wrap the bottom pair 8 times.
Then come back up (the same side as before) to the middle pair and wrap them twice again.
Then come up to the top pair and repeat from the * until you are out of yarn.
Before removing the yarn from the pegs, tie a bunch of figure 8 ties, loosely so the dye can penetrate, around each of the three "skein"s.
Then tie _really tight_ wrapping several (many, in my case!) times around the little bars that "join" the skeins, where you were coming around the outside.
Now, remove the skeins from the pegs, keeping each skein from getting tangled in its neighbor. Dye the top one a solid color, leave the smallest middle one undyed, and put dots of color on the bottom one.
(I use standard hand-painting techniques and microwave dyeing.)
When you are done dyeing, keep the three skeins separate and ball up the yarn slowly, as it will want to get all jumbled and tangled. This is where movable warping pegs are _wonderful_ -- if you scoot them closer together, you can usually re-hang the skeins and just wind off the pegs into a coherent ball with almost no trouble at all.
Knit your sock and wa-la: fair isle emerges.
The picture shows yarn wound as described and dyed blue on one section and yellow/green dots on the other (middle, small sections left undyed). Knit on the sock machine, leg is 2/1 ribbed and foot is stockinette.
I believe the dyehappy Yahoo group had a tutorial on this a while ago as well.
There are at least two other methods for dyeing self-patterning yarns: wind a really long skein (like, yards and yards the length of your two furthest-apart doors) and dye several feet a color at a time. I believe the book Yarns to Dye For covers this method. Then there's the method of knitting a "blank" on a knitting machine, dyeing that, and then knitting your sock from it. Spin-Off had an article on dyeing knitted blanks in the Winter 2006 issue I believe, if not Fall 2006.
And if you want random striping, here's a method that lets you pick the colors per band.
(based on a post by me to spindlers, 21Mar2007)