There is alot of creativity round this. The Babette blanket from Interweave has really struck a chordand I posted about it some months ago.
Lovely CraftyStylish (full of so much niceness) has a neat little tutorial page and discussion of the wonders of being square. Once you've got settled with the technique then you can get inventive and design a snuggly rug for yourself. It's a beautiful day but with a nip in the air so there's no time like the present to prepare for the cold days.
I give the link for the Babette pattern in the post but no harm in repeating myself here. The blanket uses lovely, lovely Koigu Wool Designs KPM which I mentioned in my last post. It is a wonderful yarn and comes in a galaxy of shades. If you want to create a harmonious palette of colours then a 'palette generator' might be the thing for you. I know that Veerle at nevousinstallerpas uses this method when designing with her beautiful colours. Another place to tap into is kris's colour stripes which is wonderful for giving background to the choices. A beautiful blog and with design to boot!!!
Once you've chosen your yarn and the colour mix, then the world has no limits. Here a few suggestions and I'll be popping back with the some more next week.
Moonstitches is a lovely introduction to the art of creating a thing of beauty and has lots of advise pictures which I've used here. It obviously gives alot of pleasure and we need that nowadays. Maybe that's what our grannies were searching for too!!! Hmm, I wouldn't be surprised!
Interior projects needn't stop at blankets. Little Pearl of the Orient uses them in bedroom project as a covering for a headboard. So effective.
Of course, much of the projects that you see around are inspired by patchwork and this is best seen on something like Bonnie Pierce's Elegant Squares patterns.
For a wealth of info and examples you can do no better than hop to Flikr and view the Granny Squares stream and maybe find some inspiration. I particularly love Sarah London's flowers.