mug rugs? what are they? coasters??

Basically yes.

They're usually made oversized to accommodate a mug plus snacks, like a couple cookies or a piece of toast or something.

does anyone have a picture of ones they made?

Here are the first ones that I made. I'll probably make more.

http://www.quiltingboard.com/t-126262-1.htm

They go together fast which is great and they use a good amount of scraps too.

Take a look at those, I think they make a nice gift.

http://www.quiltingboard.com/t-135575-1.htm

There should be also a Tutorial on this site in the Tutorial section.

From the size of a coaster to a small place mat.
Enter mug rug in the search feature here, and you will find a LOT of pictures and links to patterns too :D:D:D