We have accumulated a vast collection of rug fragments at our rug workshop here in San Diego. We keep them not only for use as patches in repairing larger damaged rugs, but also we often turn the fragments into small rugs in their own right.
Recently, we took several pieces from an old Chinese rug and turned them into small, usable rugs for a client of ours. This is what we began with... (click to enlarge):
These pieces came from a rug that had been in a flood and left wet too long before being brought to us. Much of the rug had rotted. Instead of throwing the rug away, we cut away all of the pieces that could be salvaged and threw the remainder away. Now these fragments (after having been thoroughly cleaned and santized) can see use again. The colors are strong, the pile full, and the look is pleasant.
Here are the "After" shots (click to enlarge):
The sides of the pieces were secured and furnished with new sidecords, and new pre-fabricated fringes were attached to each secured end. Like this:
If you have a rug in your collection that has seen its better day, but has sections of it that are still in good condition, this could be an option. Rather than disposing of the piece, see if it makes sense to cull out the good segments and make smaller throw rugs out of them.
If you would like our opinion on the matter, you can email us at firstname.lastname@example.org and we'd be happy to discuss it with you. Please include a photo or two of the rug in question.