I cut anything less than a yard down. I start with FQs, Then squares of 12-1/2" and 6-1/2" that I can stitch together quickly for a simple quilt or backing. I also use the 6-1/2" quite often for small scrappy blocks for my DJ and 365 quilts.
From there, I move on to 5" squares and 5" x 2-1/2" bricks for some nickel quilts I would like to make. Then cut into 3-1/2", 2-1/2" and 2" squares. I use these a lot as L/E's. I used to do 3" squares, but stopped because I find I don't really use them much.
Any strippy trimmings between 1-2" go into a bin for strip quilts. After that, "larger" bits go in a box for crumb quilts, and anything under 1" square goes into a bag to use as filler for puppy beds.
I'm not a big fan of jelly roll quilts, and scraps aren't enough to do the sashing or a border on an entire quilt, so I do not cut long strips.
I really like totally random scrappies, so I keep everything sorted by size, not by color.