First, I would be enthusiastic about the quilt to the quilter, making sure to comment positively on the details of the quilt. I might even pose for a photo with it. Then I would take it home and spend some time with it, thinking about how thoughtful the quilter was to make it for me. If the "ick" factor didn't disappear after a few days, I would put it into a seldom used room and wait for a few months to pass. If I knew someone who absolutely loved it, I would call the quilter and say that I had a dilemma. So-and-so saw the quilt and loved it so much and asked to have one like it. S/he knew it was a gift from you and ... I know it's awful but would you mind if I let poor so and so have it? I would never say I didn't like the colors or style. I think that would be rude and hurtful.