This type of handspun is more commonly referred to as coiled yarn. To make coiled yarn, you need to hold the core firmly and the wrapping yarn loosely at a ~90 degree angle to the core as you ply. Push the wraps together every so often to keep the coils tight and to completely cover the core.
It sounds simple, but I had a huge problem keeping the core from overtwisting during this process. Next time I will be sure to adjust the twist in the core prior to plying. I also had some issues with the baubles getting stuck in the hooks on my flyer, but that was more annoying (or was it comical?) than affecting the stability of the final yarn.
The real question is what to do with this cool yarn once you spin it? I had no desire to knit with it so I decided to put it to a more decorative use:
I believe this necklace idea is from the spinning book Intertwined. The whole thing is held together by a wrapped section in the back, which I spun up out of some excess roving. I Navajo-plied this little bit of yarn and I like how it results a nice color progression across the wrapped section.
I'm continually amazed by the all of the different types of yarn I can spin, from coiled yarn and fractally spun yarn, to textured singles and laceweight. I've been spinning so much in the past 6 months that I'm finally feeling confident enough to try new things and assume that they will work out (and to not feel bad if they don't). I guess my mother was right when she told me 'practice makes perfect'.