Not all homemade knitted gifts are horrible, you know! Get that mental image of a nasty puce acrylic cardy out of your head!
If the maker's good, then I love homemade presents. I only ever get them from my mother, though! I think my best present last year was a beautiful knitted throw she made me in 'muted bright' vareigated yarn - it glows. It's 100% wool and very snuggly, and being a snuggle-under-a-blankie-on-the-sofa person, I can honestly say I've used it most evenings since.
It's funny, cos I'm not that keen on homemade food gifts - chocolates, pickles etc - they're nice, but either I can make them myself, or buy nicer ones, and anyway I'm not keen on edible presents. (They just don't seem like 'real' pressies to me! No offence to everyone making jam, truffles, etc) But if a talented knitter or quilter makes something lovely that they know I'll love and use, that's fantastic.
Just for the record, this year I'm knitting my mother a lace scarf out of very posh alpaca yarn, making my toddler a quilt featuring fabric with his favourite vehicles on, and probably someone will be given a pair of my silver earrings.
The really sad thing is - I think I'm pretty good at handwork and crafts, but most of the people I give christmas presents to aren't really into homemade, and it grieves me. So they get shop - definitely second-best.