A pretty old makeup compact can be turned into an oversized "locket". Cut a picture to fit in the opening where the powder used to be, and secure it with some double stick tape.
Old clothes can be made into lots of neat things from bears, to blankets, to pillows. If you're not handy with a sewing machine, do a quick on-line search there are a lot of talented people out there who do this kind of thing.
These items can be especially thoughtful if the clothes belonged to a loved one who is passed away or for your parents from your old baby items.
An old jug or bottle can be easily transformed into a lamp. They sell special light kits at the hardware store with bottle stops.
An old picture frame can be made into a mirror. Just have a piece of mirror cut or buy an inexpensive one and then secure the mirror in the frame with glaziers points, staples or brads.
Teacups make the perfect holder for a custom candle. You can get wicks and wax at your local craft store. Follow the directions for melting the wax and pouring it into your container. Beautiful!
Some great gifts from garbage. I'm Mrs. Fixit and it's just that simple!