There is a wonderful article in the current issue of Spin-Off by Charlene Anderson-Shea. It is called Spontaneous Knitting and details a great idea for using up small amounts of yarn, oddballs, mini handspun skeins, etc. Essentially she casts on several hundred stitches and knits seed stich (which definitely looks woven) with a different yarn each row plus extra for fringe at the ends. I really like the look of the finished scarves in the article.
I really want to try this as I have a whole bag of odd handspun and hand-dyed yarns I'll never use otherwise. Plus I have a basket of odd skeins or leftovers from other projects that I can use up. I sorted through them all tonight and picked groups of similar colors for future scarfs.
I've heard people say all colors look good together but I don't agree. I'm trying to read more and more about color theory so I can do a better job of choosing colors when I add to the stash. For instance, I'll always try to pick some black to go with other colors. Black really does seem to make other discordant colors blend better.
I've certainly made some items with bad color mixes. Here's an example - it is a tam from Anna Zilboorg's hat book using Lamb's Pride (purple, pink, gray, brick red and dark green) and I really dislike the color combo. I gave it away to someone who thought differently.