Great idea about embellishing it. If you find a great pattern, let me know and I'll do the same.
Thanks,
Feathers

http://www.flickr.com/photos/princessnimblethimble/sets/72157600188572370/
Quilted Tea Cozy - a photoset on Flickr

http://www.craftown.com/crafts/art23.htm
Cat tea cozy craft project.

http://www.maryengelbreit.com/FreeFromME/Crafts/TeaCozy.aspx
MaryEngelbreit.com | Free From ME | Craft Projects | Blooming Tea Cozy

http://quickquilts.com/bonus/qb01_pattern/
Quilt Pattern - Tea For Two

And someone asked about a toaster cover pattern.... I didn't have one....but found one that is what I basically did...except I didn't use piping and I used upholstery fabric instead of batting for a stiffer feel and I used 1/2 inch seam allowance (cutting the upholstery fabric 1/2 inch smaller where the seams would meet....I quilted my fabric and muslin lining onto the UF first, then stitched the two seams and put a border around the bottom! OH and my toaster is more rounded so I rounded the corners.

http://sewing.about.com/library/weekly/aa011801d.htm
Sew Your Own Toaster Cover

Thank you all for the pattern sites for the tea cozy and the toaster cover. After Christmas I may get busy and measure some toasters and some tea pots and make some. A million thanks!
Merry Christmas,
Feathers

Country Quilter
Thanks so much for the websites. I will check them out.

This is really a cute idea! It sure looks so much prettier than a naked toaster! I may have to try one of these!

What an absolutely perfect gift! Great Choice!!!! I love it!