|**This is good if you are also a knitter...which I am! :-)**
I usually end up with long or odd ends of fabric after a project, and since I like to knit rag rugs and wacky purses, I make the fabric into about 1/2 inch strips, tie them all together (random colors or whatever), ball them up, and voila, I have a unique "yarn" for knitting!
I've made purses, recycle bags (the plactic bags make interesting knitting weaves), rag rugs, wall hangings, and a really off beat looking jacket this way. I have to use large needles, of course, but the final product is pretty cool. :-)
Also, I like to think of reusing those beautiful pieces of fabric I have from making DD's clothes into something I can look at and remember (like the wall hanging idea).