If you used wool yarn for your giant mittens, you might want to try felting them.  That will shrink them down and make them extra warm.

You could make one of those record bowls (there's a discussion over in Housewares/completed/restructured) for the musician.  

When I moved into my apartment, it had a really boring, cheap, black metal chandelier in the dining room.  I wanted to make it more interesting without investing too much money, or making any permanent changes.  So, I made a bunch of little strings of beads and hung them from the arms of the chandelier.  Here's how it looks now:
http://psycserv.mcmaster.ca/~domingm/craft_pics/chandelier.jpg

Ooooh!  the luggage tag idea is cool.  You could blow up an image, trace it onto shrinky dink stuff and have the bubble say ("I belong to Joe Schmo, 1234 Road St., Anytown, USA") Only with your dad's name and address.  Then punch a hole in it, shrink it down and you'd have a sturdy plastic luggage tag.  That would be sweet.

I read about this in a book, but I can't remember the book, just the project.  Anyway, the idea is that you take a boring cupboard (you could use one of those over the toilet jobs) and replace the doors with something funkier.  I made these instructions in a less than perfect art type program, so bear with me:

how about rubber cement?
Or you could just glue a piece of metal to the back of the card stock and the magnets would hold themselves on.

You could probably use a dremel or a drill (maybe with a diamond bit) to make the holes, but they might be rough enough to wear through the thread quickly.

An alternative would be to get some flat shank style buttons (the kind with a loop at the back instead of holes) and just glue the bottle caps to those.  That way  you'd see the whole bottle cap, too and not have thread covering part of it.  

It seems to me like a glue gun would work better than glue sticks - but maybe that's what they meant.  

I bet you could use a flower press.  Or you could fashion a similar device out of a couple of clamps from the hardware store and some pieces of wood.

I checked out the other things in your slideshow - they are awesome!  I love the kitty mittens and the monster purse.

Oh, and if your scarf is curly, just block it.  Lay it out flat on a towel and steam it with a steam iron (you just hold the  iron just above the scarf and let the steam come out).  I just did this for the first time last night on a curly scarf and it worked wonders - and only took like 5 or 10 minutes!