I found an entry on a website called Wise Geek that contained an interesting definition of upcycling. Always love to see the term getting out there! Also interesting in light of the conversation about rich and poor, garbage and upcycling.
Here it is:
Upcycling is a process in which disposable or discarded items are repurposed to make them valuable, useful, or simply aesthetically pleasing. Upcycling is designed to work in opposition to consumer culture, encouraging people to think of new and innovative ways to use things, instead of simply buying new consumer goods. It also benefits the environment, by promoting reuse over discarding whenever possible.
As most poor people are aware, upcycling has been practiced for centuries, and factories have long used innovative upcycling techniques to ensure that nothing they handle goes to waste. For example, grain processors often burn waste materials like husks and stems to power their plants, thereby eliminating waste and making their operations more efficient. The concept of upcycling for the average consumer was popularized in a 2002 book, Cradle to Cradle, which was designed to get people to rethink the way they use and relate to things.
There are all sorts of examples of upcycling, ranging from building houses out of entirely discarded materials to turning plastic bags into yarn for knitting. Everyone can upcycle, which is part of the appeal, and people can participate at whatever level they feel comfortable with, from delving through dumpsters to salvage useful things to re-using containers rather than tossing them or throwing them out.
Under the upcycling philosophy, everything has a potential use or value, although it might take some creative thinking to figure out what that use is. By upcycling, people generate minimal amounts of garbage, and they reduce their environmental impact by consuming less, thereby putting less pressure on manufacturers and producers.
In some cases, entire communities of upcyclers arise, with people trading expertise, goods, and materials. For example, a knitter might make carrying bags, bathmats, and other materials from things like shredded plastic bags, sheets, and rags, and trade these items for useful things like bookshelves built from fruit crates, or jewelry made from discarded bottles.
Upcycling is essentially the “reuse” in “reduce, reuse, recycle.” Many people find that once they start upcycling, it's hard to stop, and new ideas for upcycling constantly come to mind. In large communities, upcycling centers and trading posts have arisen, allowing people to expand upcycling beyond the home, turning it into a viable mode of doing business in addition to a personal philosophy.