I came across a great tutorial for project bags at needled. I promptly made three small project bags:
They are all made from fabric that I already had in my stash, and it took less than 2 hours to make all 3 bags. The bags the perfect size for small knitting projects, approximately 12 tall (including handle) x 8 wide x 4 deep. They are currently holding a pair of mittens, a hat and a plush bunny, all in progress.