I organize my embroidery supplies in a small ArtBin.
I've got the usual floss, thimble, hoops and measuring tape. I also keep a stock of extra bobbins, printouts courtesy of Wild Olive, a box of Thread Heaven, and a Prismacolor water soluble pencil. If you use thread, you should use Thread Heaven! That's the motto on the box - cheesy but true. I only bought it a few months ago and I wish I'd bought it sooner. It really keeps thread and floss from tangling while stitching, and it makes stitches look smoother. The Prismacolor pencil is my favorite for drawing or tracing patterns on fabric. It washes out with water - I don't even use soap or agitation. It doesn't stain fabric, doesn't smudge like chalk and it doesn't fade like marking pens. It's the best!
I made an envelope clutch using this (free!) pattern from See Kate Sew to hold projects. The only change I made to the pattern was using magnets instead of a button. I used the Prismacolor pencil to doodle on the faux addresses - you can see the pencil markings totally washed out. My sister made me the cute envelope needle book a few years back.
The clutch is 7.5 x 12.5 inches, just big enough to hold one project and tools. I always keep my needles, needle threader and Gingher scissors in here. My current project is (gasp!) cross stitch instead of embroidery - a pendant. I found the laser-cut blank at the Workroom, and took inspiration from their flickr gallery.
This post is my entry in the &Stitches embroidery toolkit competition. Go check out the other entries!