When it comes to old books, we usually either save them, loan them, or sell them. We don't typically plan craft projects around them. But we don't see anything wrong with the idea, especially if the book is really dated and has little reading value left. And this iPod case idea is pretty cool.
At studenthacks.org we just found 10 creative ways to reuse old books.
We've been using Bookmooch to trade books for the past 3 months (a detailed review of that service is coming soon), but there are some books that no one seems to want to borrow. We can't give them away, and we know we'll never read them again. So why not turn one into a bookshelf, or a clock? Or, like the pictiure above, an iPod case.