The colonial knot is used in hand embroidery in the same applications as the French knot. Here’s a video tutorial to help you get the hang of the colonial knot.
For ideas for application, check out these flowers made from French knots. There’s also this filled flower, which is (incidentally) also French knots:
I tend to use the French knot more than the colonial knot, but both stitches can be used interchangeably. Anything you can do with a French knot, you can do with a colonial knot! Some stitchers find the colonial knot easier than the French knot, and visa-versa, so it’s really up to you which one you use.
Here’s the Colonial Knot Video:
If you’re looking for more instruction on embroidery stitches, feel free to check out my whole collection of hand embroidery videos here on Needle ‘n Thread.