I received a Quilt In a Cup kit from my friend Dawn the other day --- and it was so much fun to make! The kit comes with a white inner liner, a clear acrylic outside piece, batting, a template, a lid and a straw.
You can use any scraps you have, and place them however you would like on the batting. Then just use a log cabin method of adding pieces in a clock-wise fashion until you have covered the entire piece of batting.
You only need to finish one side with a binding because the other side won't show from the outside. Then collect all of your pieces, and a bottle of white glue. I didn't follow all of the directions, because I didn't want the piece permanently glued inside of the cup. I want to be able to change my little quilted piece with the seasons. The only place that I used glue was down the length of the side binding. When I was all done, my finished cup was ready to fill with coffee (or a cold beverage). This was so much fun to make!