Velvet ant is a name given to over 5000 species of wasps found throughout the world of the family Multilladae. What distinguishes these wasps from others are the following features: Velvet ants are covered with brightly coloured hairs (thus the velvet portion of their name), the females don't have wings (thus the misnomer velvet ant) but do have quite large stingers, and they lay their eggs in the nests of other insect species. The developing velvet ant larvae feed on the pupating young found in the nest in which they were implanted.
Velvet ants have black bodies with hair that's either red, orange, gold, yellow, or white. The black and red combination is probably the most famous. The males of the species have well-developed wings like most wasps (and also, like all male wasps, possess no stinger) and generally have more black colouration. The bright colouration of the velvet ant is likely a signal to would-be predators that the creatures are dangerous. Colouration and size may vary greatly between individuals, even of the same species, due to various environmental factors.
The bodies of velvet ants are compact with a very strong exoskeleton which the wasps use to retain water and protect themselves from predators. Most insects' mandibles aren't powerful enough to penetrate the exoskeleton of a velvet ant. The females range in size from 6 to 25 millimeters (0.25 to 1 inch). Some species' females have a stinger nearly 6mm long. The venom delivered by the stinger is extremely potent, earning some velvet ant species the nicknames "cow killer" and "mule killer." In reality, a velvet ant couldn't kill a cow or mule, though the sting is very painful. The wasps are usually docile, however, only stinging when provoked, defending themselves, or invading another insect's nest. When alarmed, the females also emit a high-pitched squeaking sound (Harvester ants also do this).
The scientific community isn't clear on how exactly a female attracts a male, though it likely has to do with pheromones. One method researchers have discovered of attracting male velvet ants is to grab a female with a pair of foreceps and hold her above ground. Not long after doing this, a number of male velvet ants will be flying around the female. The male velvet ant population is much smaller than the female and often the males are only seen flying about in irregular patterns during a brief period in the summer, when mating occurs. Mating is brief and once finished, the female begins a meticulous search of the area for the nest of any other insect. The females will spend an incredible amount of time investigating any irregularity in the ground they come across, searching for a nest of an insect that has likely evolved to make its nest as low-key as possible due to velvet ants.
When a female eventually finds a nest, it enters in search of the nesting insect's young's cocoon. Typically (especially for North American velvet ants), the nest will be that of another species of wasp or solitary bee (a bumblebee, for instance). Outside of North America, it isn't uncommon for the velvet ants to use the nest of a beetle, butterfly, fly, or moth instead. If the parent insect is home when the velvet ant arrives, a fight ensues. The velvet ants hard exoskeleton protects it almost completely. The only thing defending insects are typically able to do is move the velvet ant back out of the nest, after which it may wait until the nest's occupant leaves or (the more likely case) come right back in and begin the fight again.
Eventually, the female will gain access to the developing young of the nest, which are in their pupal stage of development in some type of cocoon. The velvet ant breaks open the cocoon, stings the developing pupa to paralyze it (and possibly to halt its development), then lays a single egg in the cocoon. If there is more than one cocoon present, the velvet ant will repeat the process.
When an egg hatches, a grub-like larva will emerge and feast upon the pupa. Not long after, the velvet ant larva will enter its own pupal stage, using its meal's remaining exoskeletal shell as a cocoon. The size of the adult velvet ant will be determined based on the size of the dead pupa shell it uses as a cocoon. Some pupae will develop into adult velvet ants within days and emerge from the nest and into the world before the summer is over. Others will remain in their pupal state through the winter, avoiding the cold.
Velvet ants can be found throughout the world and prefer to live in hot, semiarid, and desert regions with lots of sand. Of the 5000 species distributed throughout the world, about 470 of them can be found within Canada and the United States. Of those 470, almost 100 can be found solely within California. Velvet ants don't infest houses (they're not real ants, after all) and, as such, generally don't bother humans or their pets (neither of which they would have any interest in). An aerosol spray can easily kill them. The females cover an incredibly large area of land foraging for food. Velvet ants are one of the first insects awake and moving in the morning and one of the last to retire in the evening (except for the nocturnal species). Velvet ants cease searching in the middle of the day, burrowing under debris or climbing onto plants in order to escape the intense heat during this time. Anyone looking to collect velvet ants would likely have success at this time by finding a plant in their habitat which provides some shade and shaking it so any insects attached to it come loose.
Adult velvet ants are believed to feed primarily on flower nectar and similar sugary liquids, though researchers don't know what their entire diet is. Many think that the wasps may also eat any of the young found in a nest they use to lay eggs that are too small to provide the developing velvet ant larvae with sufficient nourishment. In captivity, the wasps are fed bee pollen, fresh flowers, grapes, and honey. What's also unknown about these creatures is whether or not their foraging has a specific pattern or, more precisely, whether they will search the same area for food twice. The range of these wasps is huge.
Sources:
http://www.everythingabout.net/articles/biology/animals/arthropods/insects/wasps/velvet_ant/
http://insects.ummz.lsa.umich.edu/MES/notes/entnotes11.html
http://www.sdnhm.org/fieldguide/inverts/dasymutilla.html
http://www.upcrc.com/guides/houseid/velvet.htm | 
