I saw this over at Little Birdie Secrets, and it looked pretty easy but with enough danger to feel quite adventurous! I've often said scrapping is a bloodsport (it is for me, anyway) but truly you can't do much damage with this technique as long as you take it slowly (OH and don't work under or near the smoke alarm *winks*)
You simply rough-cut some circles or flower shapes from your fabric scraps (tulle, taffeta, satin, organza etc), then wave the edges quickly through a candle flame so that they melt. If you like the grungy look, keep the black bits, but if you're after something a little softer, trim the edges with a sharp pair of scissors. Experiment with different layers and sizes.
Stitch the layers together with beads or buttons to finish off.
Some of mine are waiting for some buttons I bought on eBay -- but the black one uses a button I got in a swap from the lovely MareeG.