"Upcycling" is a term coined by William McDonough and Michael Braugart in their book Cradle to Cradle. Basically it means taking something normally disposed of (especially post-consumer waste) and creating something new out of it.
I'm doing my bit of upcycling today. Well, to be totally honest, it's not quite upcycling in the officially official sense of the word. I pick up "trash" jewelry from yard sales (single earrings, broken brooches, abandoned pendants, loose cabochons) and put it in my "stash" of things from which to create. I hit a few yard sales today and fortunately one person was wise enough to put all their "trash" jewelry out in bags. I think most people assume no one wants that sort of thing, but I did, and I bought it, and came home with a few things I'm kind of excited to use: some filigree items that would've been quite at home at vintaj.com; a couple of cat's eye glass cabs that I plan to practice wire wrapping on; a few cute little charms, some of which used to be earrings; and 3 bracelets worth of beads that I will definitely make use of, including one that is either carnelian or red agate ovals and very pretty.
In true upcycling, people take things that most people consider trash -- cereal boxes, milk cartons, plastic shopping bags -- and make things out of them. Lots of this stuff is "kitschy" and really not my taste, but here's a listing for an item I LOVE:
Anyway, if you're interested in doing a little fun upcycling yourself, here's a link to a site called Upcycle Art: http://www.andrew.cmu.edu/user/tetani/upcycleart/htmls/projects.html
They've got soda bottle lamps, plastic bag rope twining (stuff made this way can be found on Etsy too... if I ever get a chance I plan to do an Upcycling Treasury), milk carton CD case and more.
While I'm on the subject, my goal for the month is to stop throwing away my plastics, and take my reams and reams of plastic bags to Wal-Mart. Make this a green month and do one thing to make the Earth a little happier. And maybe create something cool in the process.