CRAFT recently featured a tutorial by etsy labs on how to fuse plastic bags together to make fabric. Something I have been experimenting with at home, so I was excited to see a tutorial. And TreeHugger recently featured an artist, Anna Roebuck, who makes jewellery and art from fused plastic bags (see pic)
Check out this video tutorial on doing it. And this fantastic dress made from this method, and this plastic bag wallet from vestal design. Also check out the tutorial from in the wake which was mentioned way back on whipup.