For gifts I have made no-sew polar fleece blankets (just over 2 yards each of two pieces works great on a twin sized bed), no -sew polar fleece pillows (just about 1 yard each of two pieces and a jumbo size pillow shoved inside when three sides are finished and quickly tie the fourth closed, make a great floor pillow for kids!). I have also made layered jars (mason/canning jars with dry ingredients for any recipe you like - soup, pasta, cookies, brownies, etc. Just include the recipe and what wet ingredients they should use). I knit and crochet dishcloths, shawls, cotton market bags (some call them eco bags). I have knit baby blankets, baby hats, coasters, cup cozies, etc.
An idea you may like is to create a scrap book of your family for each set of grandparents. Get the books that accept additional pages. Leave a blank page at the end so they know you will be adding to it over the years.
at 8:01 PM on Jul. 7, 2009