Along the eco-gift-wrapping spectrum, there are all sorts of stops. Some people use plain paper and draw on it. Some people use newspaper.
If you choose to use store-bought, keep recycling in mind. The folks at Republic Services, which operates a King of Prussia recycling facility that takes much of the region's suburban recyclables, has come up with a "naughty and nice" list of holiday wraps and decorations.
The one thing that surprised me was that wrapping paper was on the list of things that can't be recycled. How come? Turns out it's often laminated or impregnated with glitter or coloring that's gold or silver. The key is that if it's shiny or glittery, try to reuse it. If it's just plain old paper, it's okay to recycle.
The nice list of recyclables: Gift boxes. Tissue paper. Shoe boxes. Christmas tree. Holiday cards and envelopes. Gift bags (the paper ones).
The naughty list that you'll have to figure out some other use for: Bubble wrap. Wrapping paper (see above). Ribbons and bows. Anything on the tree. Sticky gift labels. Gift bags that are coated, laminated or dyed. Foam peanuts (some mailing stores will take them off your hands).