Denim makes great potholders.  An old article in the Tightwad Gazette tells of the publisher, Amy Dacyczyn, making potholders for Christmas gifts by cutting out two octagons of denim.  Right sides together, lay a piece of batting or old blanket on top and stitch all the way around, leaving one side open.  Turn right side out, push out corners and press if necessary.  Slipstitch the opening closed.  She topstitched all the way around and then stitched across corner to corner making a pattern.  If you get the gold colored thread to look like jeans, it really looks neat.  She used them for Christmas presents. (This comes from Kathy Vilseck, The Scrubbie Lady.)

 
Uses for denim scraps. Denim handbags are always in style with some sector of the population. Book bags and book covers also have perennial appeal. For the coolest accessories from used denim, choose jeans that have some signs of wear, and make good use of the pockets. If there are famous-name labels, all the better for accessorizing.
Strips of denim fabric can be made into braided rag rugs. Because the denim is so durable, rugs made this way will take a lot of abuse. They do very nicely for a modern country or Western decor, and who can fault them for use in the mud room or the garage.
 Smaller scraps of denim can be chopped very fine and added to the wood pulp of a homemade paper project. They can be stuffed into a cloth tube for a draft stopper. If they are clean and not lumpy-hard, they can be used to stuff a handmade teddy or doll. The convenience of using denim for stuffing is that, as it is all cotton, it can be washed and dried with the ordinary laundry. (I've also used old cotton underwear for stuffing, after removing tags, seams, elastic etc, because it launders so easily.)  

From Rose B. Mother of 3