This wonderful blog features a variety of crafty goodness but our favorite idea is using an old T-Shirt to create yarn. The blogger includes a fully-illustrated, step-by-step tutorial along with a great crochet drawstring bag to make with the yarn.
Crafty Tips:
In order for your T-shirt yarn to curl nice, do not make your strip from fabric that contains any decoration. Embroidery, iron-ons and other transfers will make the fabric stiff and keep it from making a consistent thickness of yarn.