I cut mine into 2.5, then 2.0 and finally into 1.5 inch squares and stash them in containers until the need to play small and scrappy hits me - quite regularly. Bonnie Hunter's book "Adventures with Leaders and Enders" got me started and I have already done several quilts in this book. I have four other scrap quilts on the list to make for a charity before August and am looking at my blocks and thinking there is more cutting in my future. I am working on the "Rick Rack Nines" quilt right now. I have to add the final border and it will be ready for quilting. This quilt took almost 2700 2" squares to make the 290 nine patches.
I went through my fabric one spring and pulled anything smaller than a fat quarter or the tails on larger pieces and put them into a grocery bag (large paper one). I took them to our beach house and over the summer I cut enough scraps to make five or six scrap quilts (queen size). One of them took three different sizes and that was my starting point - once those pieces were cut, then I cut the other three sizes mentioned above.
McCalls Quilting Magazine had a pattern that used a 16 patch and an hour-glass block. That was it. They were set in rows and when it was all laid out it looked like it was set on point. I made five or six of these. They all looked different because of the hour-glass blocks and borders.
Scrap quilting is by far my favorite.