I'm working on a rag quilt for my son for Christmas. I spent an afternoon or two cutting up his old blue jeans into squares as well as cutting new flannel.
A rag quilt is made by having the seams exposed on one side of the quilt. The exposed raw edges are clipped close to the stiching. Then, the whole thing is washed and dried (probably at a laundromat) to start the fraying process. The finished quilt will have one side with traditional seams, the other will have frayed edges that look a bit like chenille.
Remind me to post a picture of the finished quilt. I hope he likes it!