My Christmas present this year was a Panasonic Lumix DMC-LX3, an excellent little digicam with a Leica lens. It's been raining around the SF Bay Area lately and I wanted a way to shoot in bad weather. I remember seeing instructions years ago for taping the hood of a rain-poncho onto an SLR lens-hood so the whole arrangement covered you and your camera, making you look like an old-school view-camera operator.
There is no lens hood for the Lumix, and I don't use a poncho in the rain. I wanted a small kit to carry with me just-in-case. A few dollars at the hardware store and a Ziploc and my camera is storm-ready. As a bonus, I ended up with a rather elegant lens hood for the camera, for when the sun is out.
Lens hoods are good for reducing glare on a lens. Modern lenses are so well coated (against glare) that you can get away without a hood, but using one can increase contrast and is at the very least an aid when shooting towards bright light sources. My hood also protects the small extended lens from getting knocked when the camera is swinging at the end of my camera strap.
The cost of materials is only a few dollars, plus about 30 minutes of time. You'll need a couple tools, but they don't have to be the ones I used (I'll note options as I go). You'll see that the project is pretty specific to my Lumix, but you'll also see that it is basic enough that it might be modified to work for other cameras.
Critical to this project is that your camera that has a raised, fixed ring outside the movable lens assembly (digital camera lenses are always moving in and out as you zoom). There might be other ways of affixing a makeshift hood (mailing tube?) to a differently configured camera body (elastic bands, tape, glue), but none quite so simple as this. I know this is very specific to the Lumix, but maybe it will inspire solutions for other cameras.