Here are some ideas:
Sometimes I make flowers.
Other times I make scrap yarn afghans
This one is a sample of a scrap yarn afghan a la Charlotte. I usually use two strands of rotating scrap yarn and one strand of constant yarn (in this case tan) throughout. I've made probably five to seven of these, and I've found that they work GREAT for camping or picnic blankets. Since they're just scrap yarn, I don't feel a need to keep them in pristine shape, so I don't get bent out of shape when they get dirty.
This smaller one is an afghan that my husband's grandmother started years ago. After she passed on, it went to his mother, and a few months ago his mother passed it on to me. I add a line here and there.
If I have leftover decorative or novelty yarn, I'll usually save it to use in packaging for my etsy sales.
My mom recently sent me a listing of some other ideas. Here are some of my favorites.
A reader at favecrafts.com uses leftover snippets as pillow fill
A yarn ball wreath or yarn egg wreath is always fun.
Check these out here:
This apple is easy enough that a child can help, but still pretty darn cute.
This yarn art looks complicated, but once you look at the instructions, I think it might actually be do-able.
Any other ideas?