Rug Fringe1.
http://hem.bredband.net/annbet/Minis/Needlepoint/fringe.htm2. Use grosgrain ribbon twice the width you need for the fringe, cut in half lengthwise, and pull out the threads along the length. Voila perfect fringe and the selvage can be glued to the back of the rug with fabric tack.
3. Cross-stitch fabric is very handy as fringe.It can be cut to the width you need and frayed. You can tint the fabric with watered paint and let it dry before gluing in place.
Wanna in El Paso wrote:
What to do with all the pulled threads from making the fringe. I used green grosgrain ribbon to make the fringe for a pillow a few months ago and mused about the exact same thing. I took several of the threads and tied knots all along the length of the cluster. If you put a dot of glue on the back of the knot and let it dry, then cut off at the knot you will have a tassel. I wound up using the tassels instead of the fringe on my pillow because I liked the look better and they were more reminiscent of my mother's old pillow anyway. You can see the tassels in use here:
http://wannainelpaso.com/displaylamps/display_lamp_shabby_chic_roses.shtml