Here’s a neat idea I found at diylife.com :
These traditional Japanese square cloths are getting a lot of attention lately, as a “green” alternative to wrapping paper and plastic shopping bags. Furoshiki means “bath spread” — in feudal Japan, they were used to bundle and protect people’s clothing at public bath houses, but over the years, their standard use has been to tie up any bundle you can imagine (they’ve even been used as baby carriers). The word is pronounced something like “f’-ROHSH-kee”.
There’s a download mentioned in the article full of diagrams showing how to use this technique  and I love the idea of printing this off to include in a wrapped gift (idea mentioned by M.E. Williams – the DIY Life author).
Also check the blog post for some videos, my favorite is this one showing how to tie and fold them:
Excellent article and this gives a whole new flurry of ideas for gift wrapping and totes!
Also check out this 2 Minute Bag , it’s made with a large square of fabric (about 41″) and two hair bands.