A really cute use for some left over multicolored yarn is this yarn friendship bracelet from skip to my lou.
Good for ages 7 and up.
Get the instructions here:
http://www.skiptomylou.org/2010/06/11/friendship-bracelets-from-scrumdilly-do/
Lets do something crafty takes several strands of yarn and ties them together at short intervals.
Get the instructions here:
http://letsdosomethingcrafty.com/yarn-jewellery/
Twitchetts twists three colors of yarn into what she calls a two minute bracelet.
Get the instructions here: