I covered my crochet hooks using those foam clay I found at the local bookshop.
It's great! As far as the softness and the padding it provides for my fingers.
It also won't hurt the hook any bit. No trace of it will be left when you rip it off.
You can also easily replace the clay when it's worn.
Only one major weakness: Water.
It will turn gooey and sticky and yucky when it came in contact with water.
So it is unsuitable for those whose hands sweat a lot. Unsuitable for the wet climate.
They do get dry if you leave it in the open though, but it's not quite good enough.
Right now, I've still not gotten any idea how to get around the problem. Back to finding some other alternatives I suppose...