I got the fabric at Fabricland and it was 40% off!! The colours of the stripes on the fabric match our wall colours perfectly. The yellow stripe is the exact colour of our living room walls, the brown ties in nicely with out couch colour and accents in the room, and the red stripe is the same colour as our dinning room (which is right across the hall).
The fabric is linen and so it goes a lot better with the casual / rustic / cozy style of our living room's decor!
I followed the tutorial below when making my 'Envelope' style pillow covers:
Here is what the old pillows looked like:

And here they are with the new pillow covers on them:






Fall 2010:
Christmas 2010:













