I've completed my first recycled t-shirt rug, a circular rug which is woven out of strips of old t-shirts, with a hula hoop used as a template. The tutorial can be found here. This is mine:
Its a fun project, and looks effective, but there are a couple of discoveries on completion:
1. You need a lot of time to complete a rug, my weaving consumed most of my two day weekend.
2. You need a lot of patience, it becomes tedious.
3. The further down you get, the less neat, you have to pull your weave through a bit tighter toward the end.
4. I started tying knots to attach each strip of t-shirt to the next. Knots can look quite bulky, so I quickly changed tactic, and used a needle and thread to sew the next strip onto the previous, before weaving through.
5. You don't need to use t-shirts, you can use fabric scraps, but jersey fabric works best as it doesn't fray.
6. I believe you can get larger hula hoops that I did, which will leave you with a bigger rug. Mine will be big enough as a large table centerpiece, or perhaps a bath mat, but it would not be big enough as a rug for a lounge room.