How to Recycle Fabric
The obvious answer to the recycling of fabric is to make it into other things. Anyone who sews even just occasionally will know that there is a certain amount of "left-over" scraps that just aren't good for much of anything given their size. I sew a lot, and it bugs me to have to throw anything away because I am also passionate about recycling. So here are a few things I have come up with to "make the most" out of both my fabric and store bought clothing.
Be Thrifty: My family shops almost exclusively for basic garments at our local thrift stores. I live in an urban area and the selection there is always excellent, so I haven't paid retail for jeans or basic shirts in years. This satisfies most of the "reduce, re-use, recycle" mantra because we also donate our clothing cast offs. I used to just pitch things that were thread-bare, but then I found out that the thrift shops are also selling bulk lots of garments that don't sell or are worn out to international manufacturers that recycle the "rag" fabric. So I don't worry about whether a garment is wearable any more and that feels so much better than considering how long it would take for a pair of kid's khakis to break down in a land fill.
Get Creative: Whether or not you can sew, there are plenty of ways that you can recycle textiles that don't require a lot of skill. I use old towels and washcloths for cleaning up all over the house. Looking for a more aesthetic idea? How about felting/fulling an old wool sweater in the wash then cutting it up to make slippers, bags and mittens? Any sweater that is mostly animal fiber - angora, cashmere, Shetland - will felt in hot water. Throw in a couple pair of jeans to help the fabric felt up evenly. I've also used tennis shoes to aid in the fulling process.
In addition to sewing, I also knit and crochet. With some patience and planning, you can deconstruct old knits - sweaters, skirts, etc - and re-use the yarn to make other items. Be careful to choose a knit that does not have serged seams; they indicate that the garment was probably cut from a large fabric and you will end up with lots of little strings and very little usable yarn.
Don't be afraid to make old clothes into new clothes. Unless sewing is very new to you, it is a great way to freshen up the wardrobe. Embellishing clothing has become a popular trend. There are hundreds of articles online as well as books and magazines that can give you inspiration. Re-purposing - aka new use - is also an option. Altering existing textiles to become other items that are useful and attractive. Why not make curtains from tablecloths? Or turn a skirt into a little girl's dress?
Weird Science: What to do with all the rest?