Newspaper headband, anyone? How about a newspaper rug, knit from newspaper yarn? Or a newspaper dress? Crafters have made them all.
I'm a little biased, but I've often thought newspapers are far more useful than just figuring out what's going on around the community and in the lives of the “Family Circus” family.
Day-old papers make perfect drop cloths for, say, painting and re-upholstering a chair. 
My other creative reuses for newspapers include making hats (an old standby) and as a way to stifle the crazy weeds growing in my garden. I got this idea from late features editor Becky Mabry.
After I tried the latter, I told her that it worked but looked a little trashy. She could hardly contain her giggles when she told me she used newspaper on the ground and then mulched over it. I guess I need to add mulch to my shopping list this year.
And apparently, I need to broaden my crafty newspaper horizons, as well. I've come across several awesome re-uses for newspapers lately, and they're way more creative than anything I've come up with.
(And the term blogs use in reference to these projects is upcycling. A quick Google search tells me that upcycling is “a component of sustainability in which waste materials are used to provide new products.” I think of it as reusing, but hey, if you're making new things out of yesterday's newspaper, you can call it whatever you want.)
(Photo from http://shop.feyhandmade.com .)
And this handspun recycled newspaper yarn  is genius, but way above my level of craftiness. If you were into spinning and knitting and all that good stuff, it would be really cool to see what you could make and how your creations hold up. I'm content to dream about a newspaper doormat.
I did a quick search for other crafty projects incorporating newspapers. I found Christmas tree decorations , wallpaper (which is super cool, but how do they keep it from yellowing?) and a newspaper log roller . The latter reminds me of the hay twists Laura Ingalls Wilder wrote about in “The Long Winter” and make a lot of sense. (Sorry, I'll quit with the dorky children's book references.)
This woman even made a newspaper dress.  I'm not sure I'd go for that – I love newspapers, after all, but I don't think I'd ever wear one.
But I'm inspired by these newspapery craft projects. There are so many possibilities.