I'm one of those weirdoes who gives a yelp when I find a discarded bottle cap. Bottle caps fit into the "excellent" category for frugal decorators: They're plentiful, they're free and they can be used in many ways.
If you don't believe me, try a few of these projects and see for yourself.
Stepping stone. I have a brick walkway, laid in sand, in my back yard. Every so often I pop out one of the bricks and adorn it with whatever found objects I have on hand. My most recent addition is a bottle cap-covered brick.
Here's how to make your own: Clean off a brick or cement stepping stone. Spread a thin layer of tile adhesive over the top of the brick. Push bottle caps into the adhesive, leaving a quarter inch or so between each one. Allow to dry for 24 hours. Mix a small batch of sanded grout according to the package directions and spread between and over the bottle caps. Wipe off the excess with a damp sponge. Allow the grout to dry for 24 hours and apply a grout and tile sealer (so the grout can withstand rain).
Yard furniture protection. Keep the legs of your wooden garden furniture from decaying by hammering bottle caps into the feet of your chairs and tables. Coat the caps and nails with floorwax to ward off rust.
Bottle cap collection. A fermentation-frenzied friend of mine enjoyed visiting small breweries to learn the brewing process each company used. He collected caps from obscure breweries from Czechoslovakia to Chile, which he displayed in a bowl on his coffee table. His brother collected caps from Lucky Beer because he enjoyed deciphering the word puzzles imprinted on the inside of each cap (the caps were so popular that he sometimes had to hide them so his guests would talk with each other).
Why not start your own collection? Since most sodas now come in cans, Coca Cola, Fresca or Sprite bottle caps might become collector's items some day.
Yard decorations. Hammer caps in rows onto fence posts, on the sides of your potting shed or across the top of your gate.
Chic jewelry. My Dad delights in wearing bizarre belt buckles, hat bands and pendants that he has made. One of his favorites is a necklace from which a Ritz Pink Grapefruit Drink bottle cap dangles along with a little cherub charm.
Here's how to make your own recycled pendant: Flatten out the cap by placing a rag on top and gently tapping it with a hammer until you have the desired flatness. Hammer a hole through the top part of the flange and thread a metal ring through it, lacing a chain through the loop. Embellish the cap with a tassel, charm, earring or bead that you dangle from a metal ring attached to the bottom of the cap.
Refrigerator magnets. For arty, Earth-friendly gifts, create a mini-collage, cut out an image from a postcard, or use a charm and glue it to the inside of the cap. Use a glue gun to attach a magnet to the back. Or, make mini-photo frames: Cut out a little picture of your dog or family and glue it to the inside of a cap.
Toys. One of my creative friends made a fun game for his daughter. He cut out openings in several cardboard boxes, painted clown and animal faces on them, gave each one a number and stacked the boxes in a pyramid. He taught his daughter how to snap her fingers to propel bottle caps into the box's gaping mouths. Whoever got the most points after snapping 20 caps was the winner.
Other ideas: Homemade wooden trucks look great with bottle-cap wheels. I used caps as drinking bowls for the field mice we caught when I was a kid, and as cool-looking dishes for my GI Joe doll.
Kid's musical instrument. My kindergarten teacher made bottle-cap noisemakers that I wildly whacked during "music." To make one for your child, cut an 8-inch length of 2-inch by 2-inch stick (or a tree branch). Hammer a large hole through eight bottle caps. Poke a long, skinny nail through a pair of caps (so that the caps can slide freely up and down the shaft of the nail), and hammer the nail part-way into the stick. Repeat with the other pairs of caps, positioning them 1/2 inch or so apart. Turn on your child's favorite music and tap the flat part of the stick against your palm and rattle away.
Wood decorations. Anything made of wood can be covered with bottle caps: boxes, bed frames, crosses, dressers, doorways, decks, cabinets — you get the idea.