Let me tell you, I was sold! I went to my favorite fabric store after Christmas and bought a variety of Christmas fabric on clearance. I cut the fabric into a variety of sizes. Each piece of fabric was then folded in half and sewn up three sides, leaving the fourth side open. When I "wrap," I simply close the fourth side with a safety pin on a bow. (I also attach the gift tag to the safety pin.) If you really want to get fancy, you could use velcrow to close the envelopes, but I didn't spend that much time.
The bags look absolutely lovely under the tree! Since they are reused every year, I not only am being "green" and helping the environment, but I'm saving a TON of money on wrapping paper and scotch tape. My "wrapping" is done in a jiffy!