Rag Rugs are Rad ! *(Try sayin that 5 times fast)
We found a really great set of instructions involving a crochet technique over @ http://www.homesteadweaver.com/braidedrug.htm and I'm pretty sure Megan Nicolays book Generation-T
http://www.generation-t.com/ has a lesson in it as well for making a cool shag-rag-rug.*(theres another good one)
Hope that helps and thanx for the show suggestion.
-Rob