The gift I had most fun making is a modern take on the "mix tape." Who doesn't love mix tapes?!
I made these all the time. They are always a winning gift for countless reasons:
A) Sharing is good. Sharing music is better.
B) YOU create the 'album cover'.
C) Option to add personal notes, pics etc.
D) It's completely personalized.
E) You get a groovy new mix out of it!
and F) Mix tapes are cool.
Need: Music selection, ability to record music (doi), bits of scrap (ie. stickers, mag clippings, pics, fabric), scissors, some sort of adhesive, blank write-able discs...you get the picture.
Cost to me? About a buck.
Step 1: Play DJ
Are you of the itunes generation? This is comprable to exchanging music via 'mix tape'. DO NOT, I repeat, do NOT throw a mix together absentmindedly. It is not worth anyone's time nor ears.
Ok, so compile your list. I fancy itunes.
I recommend listening to your mix thoroughly before burning. Make sure the transitions are cool. Lead in and ending are apropos. You want this mix to be listened to!