I've seen many renditions of homemade coasters on the interwebz. Some using paint, napkins, rubber stamps, monograms, etc. I used scrapbook paper because it comes in soooo many different colors and patterns and can be easily personalized for the gift-receiver. I made these for Christmas presents for co-workers, and am in the process of making a set for each of my sisters.
* 3 3/4" square tiles (set of 4) from Lowe's (I looked at Menard's and Home Depot also, but liked tiles from Lowe's the absolute best. They are called Sierra Beige something-or-other, and I like them because they have flat tops and straight sides - easy for Mod Podge-ing)
***Look over your tiles in the store and make sure no corners are chipped***
* Mod Podge
* foam brushes
* clear acrylic matte coating (aerosol)
* scrapbook paper cut slightly smaller than tiles (I cut mine 3 5/8" square)
just a SAMPLE of the beautiful scrapbook papers out there