As for me, I fall into the second category and like to turn my orphans into mini quilts to be used as potholders, etc. In the spirit of full disclosure, first they usually go into a drawer, and I have quite a backlog at this point, but eventually I have a "deal with the poor orphan blocks" day and then they get to come out and play :-)
For those new quilters out there who don't know what orphan blocks are, they are the extra blocks leftover from making a quilt. Yes, it does OCCASIONALLY happen that the number of blocks doesn't come out exactly to what you need and you have extra. I say this tongue in cheek because this is not an occasional occurrence for me, it's a regular one LOL. Or you make a test block that doesn't get used in the final quilt. As a rule I'm not a test block maker, but I know many quilters are. Or in the case of one of my recently quilted orphan blocks, I made a mis-cut when piecing for the quilt, so this one block had to get rejected because it wasn't going to end up at the correct size.
No matter how we get them, they seem to multiply much like scraps do. So I am trying to not let them pile up quite so high and to deal with them more timely as they get produced. I was traveling recently and binding little orphan blocks is the perfect handwork for airports and airplanes. I got these two blocks bound during that trip. I had lots of other handwork with me so I didn't get as many blocks bound as I took on the trip.
These two blocks have cotton batting in them so they will be used as trivets although they may also be fine as potholders as long as the temperature isn't too hot and the item isn't held too long. I use Insulbrite in orphan blocks specifically intended to be potholders. Then I know they are safe for use with high temperatures. If you aren't familiar with Insul-bright, you can find it at the big box stores for a good price, especially if you catch it on sale. It looks like this:
These two Christmas orphan blocks have Insul-Bright in them. They end up a bit thicker and stiffer than they would with cotton batting and they have a little crinkle sound when you bend them. That makes it easy to tell if Insul-Bright has been used rather than cotton batting.
Here are three more Christmas orphans that are quilted with regular batting. The rectangular one would be great as a mug rug and the other two would be great for displaying some smaller Christmas decorations or simply using them as over sized coasters.
As a bonus to turning my orphans into mini quilts, I get to use up some of this:
Those are my bags of binding left over from binding my quilts. I can generally find something in these baggies to match the orphan blocks and it is a good way to use up small lengths of leftover binding. I also use these blocks to practice my machine quilting skills. This is a good way to get practice without turning a large quilt into an eyesore lol. I currently have one poor little orphan that came out worse for the wear after I tried out some new quilting designs on it. It's not the actual quilting that is so bad, but rather the designs I used, where I used them, and the thread that I used. The quilting became way too busy and overwhelmed the block itself. I am keeping it for future reference to hopefully show me how far my machine quilting skills have come!
I have more to say about orphan blocks, but this post is getting long so we will leave it as is for now :-).