The Wikipedia definition goes as follows:
Upcycling is the process of converting waste materials or useless products into new materials or products of better quality or for better environmental value. http://en.wikipedia.org/wiki/Upcycling
Upcycling is the opposite of downcycling, which is the other half of the recycling process. Downcycling involves converting materials and products into new materials of lesser quality. Most recycling involves converting or extracting useful materials from a product and creating a different product or material.
I've always been a huge fan of upcycling and I'm listed in the directory of the http://www.theupcyclemovement.com/ along with many other Irish people who love repurposing as much as I do. One of these is Mike from the Refined Pallet
https://www.facebook.com/TheRefinedPallet - do have a look at his page if you have time. He does really beautiful work, all created from pallets and other abandoned materials.
The work I do is on a small scale by comparison but I do love to make use of things that would be thrown out otherwise. Mostly I use jars and ceramics to hold my candles but I also use all the little bits of ribbon attached to clothes that people normally throw out. I can easily incorporate these into cards and candle presentation.
Of course it does sometimes take a little work to make the item into something new and beautiful -