This is a great idea!! I'm totally in.
For my parents/inlaws: photobooks and calendars with pictures of the kids. There is no gift they like better. I keep an eye out for coupons from the various online sites that do this - shutterfly/snapfish/etc. I realize this one isn't exactly a homemade gift, but it fits the spirit of what I like to give.
For my 4 year old son: I'm making him an angry birds game with plushie/rice filled birds, pigs made out of cans, and crates/obstacles made out of spray-painted pvc pipe. I'm also making him a buzz lightyear costume - if I can't get it made in time for Halloween, it'll be for Christmas. :)
For my husband: I ordered a large variety of beer coasters off of ebay. I'm going to mod-podge them together and mount them underneath a round glass coffee table that he has in our game room. I will also update the metal base of the table with new spray paint, etc.
For my 2 yo niece: I'm making her a princess costume.
My sister and I have an agreement where we don't buy each other gifts for christmas and birthdays. Instead, when we see each other, we go out to a nice restaurant together with just the two of us (no kids, no spouses).
For all extended family: this year we're making herb infused oils/vinegar for the adults. This website has great deals on glass bottles/containers in a huge variety of shapes:
http://www.specialtybottle.com/