What is this yellow fuzz on my oak tree?

Botanical folks,

I’ve a lovely mature oak tree in my back yard. It seems in all respects to be a healthy, happy tree, merrily photosynthesizing, offering homes to small animals, and doing all those other things that trees do.

However, for the last several autumns, it has developed these odd yellow fuzzballs. They grow near the bottom of leaves, for the most part, and have small red seeds inside. Earlier in the season they mostly seemed to fall with leaves; now they’re falling solo. The backyard’s quite covered in them. It may or may not be related, but we also have no acorns this year. I haven’t any idea what sort of oak it is, exactly, but hopefully that’s not important.

Would any of you have any idea what this is, and whether it’s harmful to the tree? I’m really rather fond of it, and would hate to see it come to harm.

Pictures of the fuzz, seeds, and leaves–both with and without fuzz–can be found at photobucket.

Looks like wooly oak galls, also called fuzzy oak galls.
It’s a banner year for wasp galls [Corrected 10/23/07] ; Many in southern Maine are puzzled by the abundant little balls of fuzz under their oaks.

The internet is not overflowing with information on these galls, however:

Oak galls
Gall wasp

Huh! The information/photos I’m finding seem to be in keeping with what we’ve got here, including the fuzzy balls dropping when the leaves start to change–the yard is strewn with them right now. Sounds like they’re no cause for serious concern, though. Thanks!