i am a huge fan of using unconventional materials in the illustration field (and fine art/design fields in general). so in my illustration concepts class, where we are generally let loose as far as materials go, i tend to go a little crazy. here's an illustration i did for the story "chicken little":
this is appliqué and embroidery with fabric scraps and tracing paper on linen.
in a similar vein, and with a cool mixed media approach, is caroline hwang. she does sweet combinations of fabric and stitching and paint and paper. below is my favorite: