I'd like to modify a stuffed animal to react to petting/scratching. The last toy I had with a feature like this was a Furby, which you "petted" by simply pressing a rather obvious switch hidden just below the fabric. Has the state of the art progressed at all in the past decade? I feel like conductive thread would be a good place to start, since it could be sewn right into the fabric, but I'm not sure what to do with it.
My first thought was conductive thread too...
There are a lot of people who do embedded circuits into clothing that might provide some insights. Wearable Computing yielded some solid search results for me. Lilypad Arduinos get stitched into clothes with conductive thread, looking at those designs online might get your further down the rabbit hole.
I've seen a few designs out in the webiverse for winter gloves that insert conductive thread patches into the finger tips to make capacitive touch screens work for folks.
A few links which may trigger some ideas/answers: