I learned about composting old clothes while watching a very funny and odd "instructisode" by The Guide Girls. They're a comedic/environmental duo who make informative videos about greening your lifestyle. My friend Sarah told me about them, and I recommend that you check them out. They're funny and helpful.
Anyway, I decided to try putting some old socks in my compost pile. I chopped them up into small bits to help them break down more easily, and I cut out the elastic band at the top. Dakota goes through a lot of socks, and we can't use all of them as rags. So, this seems like a great way to get rid of old cotton clothes that can't be donated, like socks, underwear and, well, rags.

Speaking of composting, a couple of friends recently asked me what kind of kitchen compost bin I'd recommend. I've tried a few options, including the plastic kind with the charcoal filter in the lid, and I think my current setup is my favorite. It's a stainless steel pail, which doesn't absorb any gross smells or harbor any nasty bugs. For easier dumping and cleaning, we line the bin with BioBag Waste Bags,

I know other people like to keep their compost in a resealable plastic container in the freezer. That seems like it would work pretty well, too.
i never thought about dryer lint in the compost. of course! thanks.
I do the dryer lint thing...did know about the sock thing, pretty cool, with 6 people in the house we got lots of old socks :)