http://www.allfreecrafts.com/ Some of my favorites are soups and drink mixes. With folks feeling the pinch of the economy these days, I would think these would be much more welcome than just another knick knack to set on the shelf.
I also have kept most of the sweaters and mittens that I have been blessed with. I'm thankful now that I kept my mom's hand knit socks and mittens for the kids. These will be priceless keepsakes...especially since I'm not that talented.
If you are a baker, consider giving a gift certificate to friends/kid's teachers for cakes/cookies. You can set your own rules...like "please give me a week's notice, " etc. On my 30th birthday, my husband used one such gift to procure my birthday cake!
Why not give a gift of a meal a month-or even a loaf of bread- to an elderly friend? (Or anyone, for that matter!) Let the person know that you will be delivering a meal the "first Monday of every month at 6 pm." Then just make a double recipe for whatever you happen to be preparing that night. Not only would Aunt Emma love the food, she would love the visit even more.
My husband has a box of thank you letters that he has received from students and parents over the years. These heartfelt notes mean more than any other gift.
What are your favorite homemade gifts?