We're absolutely crafty in order to be frugal (and also because it's fun to be creative).

I love sewing for DD because I get to select the fabrics and styles and don't have to rely upon what some clothing buyer decided is trendy this year.
I do all of our family's alterations and have saved over $100 last year in what we would have paid a tailor to shorten slacks.
One of my favorite pasttimes is buying used clothing that needs simple repairs or alterations. At garage sales it's often practically given away for nothing when the owner doesn't know how to repair it.
I sew all of our curtains and other window treatments. Am planning duvet covers for DD's bed (she doesn't need them for a while yet).
I do simple upholstery (chair and footstool covers so far).
Basically if it's something that can be learned, we'll give it a go in order to avoid paying someone else to do it or make it.

--Kari
Oh, I also forgot that often the quality of the work is better than we could afford if we bought the item manufactured!