CD coasters - glue felt or scrap fabric on one side and paint/collage on the other.
CD Book - Use a hand drill to put a hole in a stack of CDs at one side, which you can run ribbon/string/big old keyring through to make a book. Basically you collage, paint, scrapbook each 'page' and turn it into a journal, album, address book or whatever.
CD animals - hear me out, I know it sounds ridiculous. Take a cd, add paper fins and stuff and hang it up, but instead of making goldfish or little nemo's, make evil looking viper fish or piranhas or something. They look pretty hanging up, growling at people as they walk by.
You could go the duct tape route and make wallets/purses.
If anyone knows how to crochet, cut strips from plastic bags and crochet them into a tote - handy for dumping wet swimmers in after a dip, or reusable shopping bags.
Paper strips can be painted with glue, rolled on chopsticks to dry then painted or varnished to make beads. These can be strung into jewelery, door curtains, windcatchers, or even made into bowls and things. Good way to use up old magazines/newspapers.
Old bottles can become new gift boxes - decorate, add tags, fill with homemade bath salt (rock salt or epsom salts scented with essential oils or perfume), or in-a-jar cookie mixes. Or make lanterns - lose the lid, decorate with glued on tissue paper or paint, stick in a candle and make a wire handle.
Tin can lanterns make good use of soda cans or food cans. Fill with water and freeze, then take a tin punch and hammer and punch in designs. Add a wire handle and a tea light candle.
Old plastic bottles can be turned into racing cars or rockets with some creative paper decorating and a bit of bi carbonate of soda and vinegar. (My husband, a high school science teacher, does this with his kids all the time. I never have any bi-carb in my cupboard!!!) There's a way to turn them into submarines too, but I don't have the technical details for that one.
You could make collage paper angel/doll things out of old magazines and bits of ribbon, wire, beads, etc... good way to display poems. Um, I have a picture of one from a shop, here (sorry the image isn't great):http://www.flickr.com/photos/85106316@N00/2265497065/
Old clothing/accessories like shirts, ties, bandannas, jeans, etc can be revamped using stencils and fabric paint or acrylic with fabric medium, or sew into wallets, purses, bags, cushions, pillows and plushie type toys. Cut up scraps of fabric can be used as filling for the latter. Softer fabrics like fleece, old sweats, etc can be cut into squares, stitched together then finished with blanket stitch to make blankets and throw rugs. These can also be stenciled or otherwise decorated (and donated to charity, hospitals, nursing homes etc, if you're looking for a community craft).
Socks and gloves can be turned into toys/puppets - there was a sock monkey challenge on here a while back that was awesome, and I'm sure it would give you plenty of ideas.
Make cards or stationary using stamps made of old junk like bubble wrap, carved erasers or lino tiles, crumpled foil, etc. Books exiting circulation can be recycled - turned into altered books or journals. There'd be plenty of examples on the forums here.
Making jewellery from bits and pieces is fun, but you'll probably need things like pliers, findings etc. and someone who knows how to use them.
CD cases can be glued into boxes, displaying album art, poems, photos, mini-collages, etc.
Okay, I'm gonna stop now.