I have made a whole load of cotton knitted facecloths for different people one year, and given those with a small bar of nice soap. I found a website with patterns for every letter of the alphabet, and others with images like a butterfly, coffee cup, pig, sun, boat...all very simple - just changing the numbers of plain and purl stitches as the pattern developed. They only take a couple of hours to do if you are reasonably speedy knitting - as each was only about 50-60 rows, of about 50-60 stitches. I added a hanging loop to a few (once I'd figured it out) by doing an I-chord at the top and looping that back in. Thicker cotton works better - dk or even a bit thicker.
But you could also take a square like that to put into the middle of a cushion cover, or as a pocket on a tote bag, ....or other ideas I'm sure, to personalize other things. I just have no idea right now what the website was, I'll try to check my file of printed patterns at home, but quite possibly it was linked from somewhere like about.com's knitting pages.
This year, I am knitting lots of scarves. I've also done cotton beanie hats, which work well and are very useful for any people (especially DCs) who have skin issues and find it hard to get warm but not synthetic knit hats.
I made loads of little felt stockings over the years as tree decorations, I like both red and green ones. They can be decorated with all sorts of little sequins, bits of ribbons, other small felt shapes, some cross-stitch or embroidery etc. And the little loops of ribbon you get holding tags to clothes can be perfect to make the hanging loops.
Other felt shapes that I have liked for stuffed tree decorations are gingerbread men (using brown felt, and white ric rac for indications of clothing, and a couple of beads/sequins for facial expression, white embroidery floss to blanket stitch 2 pieces together), stars, birds, fish, holly, heart etc.
A stiffened circle of fabric with an embroidery or cross-stitch design can also be nice as tree decorations. Or you could do a simple pattern to a corner of a tablemat/napkin, and make up a set for a table (either Christmas or for more general use with a non-Christmas pattern).
For small DCs, I've made "taggie blankets" before - cut out a plain rectangle, or their initial, from fleece, sew on loads of loops of ribbons in different colours and textures (I tend to use ribbon that's not too narrow and double sew it on so it can't be pulled off), and then back it with another piece of fleece. May seem extravagant when thinking of getting 8-12 different ribbons, but a half or 1 metre of those could make up half a dozen blankets as you only need small loops for each.
Tote bags, reusable (and foldable into a pocket or pouch) shopping bags, mobile phone cases, glasses cases, etc are all sewing projects.
If you want ideas for DCs, I found this blog to be interesting. She started doing 12 different crafted gifts for her DCs for Christmas, and tried out some interesting things - and did a lot of tutorials on the way!! But play food, a mail person's kit, dollie things, all sorts.
I've also made a few crayon rolls, and given those pre-filled with either crayons or short twistables (depending on the age of recipients), and a colouring book/pad of paper.
I don't have many links, as I tend to print off patterns rather than save links - but there are lots on the web of you google, and often crafters link to other crafters from their blogs so you'll get tutorials and patterns and ideas and tips once you start looking around.
I also like to make things like mincemeat (and leave it mature a long time!), dried herbs from the garden, alcohol infusions (limoncello, sloe gin etc) that can be done months in advance. And then maybe some baking or sweets at the last minute.
Decoration set ideas Facecloths made
Sew: Quilted: Knitted: Crocheted: Plastic Balls Paper/Card Apple
Felt Stocking Bird Bell Star(s) Pot pourri Santa BBQ
Felt Fish Tree Tree Bell Scenes Star Sun
Felt holly Star - 5 point Stocking Snowflake etc Snowflake Coffee Cup
Felt heart Star - 6 point Hat Basket Snowman Skull & Crossbones
Doughnut Star - 8 point Snowman Angel Angel Dog
House Santa Reindeer Spider
Birdhouse Sleigh
Holly leaves Parcel
Heart Bird Facecloths to make
Wreath Fan Heart
Christmas Pudding Popsicle stick sleigh Pear
Ribbon Bow Other Crafts Ideas: Flower
Candy cane Facecloths (& soaps) BBQ (set potholders)
Candle Sweets Star
Stocking Cookies Xmas Tree
Gingerbread man Fleece blanket Ladybug
Tote bags Sailboat
Pin cushions and needle books Lighthouse
Lavendar pouches Music note
Minders? Potholders (with Caoimhe handprints) Hot pot holders Tea cup
"A Helping Hand" Apron (with Caoimhe handprints) Aprons and chef's hats Sheep
Mobile phone covers Turkey
Cooking Christmas Cookies Glasses case Baby feet
Mincemeat Hair towels Button
Sweets Crayon roll - denim Initials
Jams Stuffed Animals Numbers
Chutnies Felt play food Butterfly
Caramelised onions Covered glasses cases
Alcoholic beverages Lap blankets - quilted/knit Re-usable shopping bags
Mulled wine spices Makup brush roll Little washbag pouches