This idea is originally from DC-based interior designer Barbara Franceski, and I've been waiting for a rainy day to apply it to a pile of old canvas paintings from my prolific middle school days when I cranked out a painting per week (thanks, Mom, for saving them)!
It's a pretty simple concept: remove the old canvas, salvage the frame, and recover it with a beautiful fabric of your choice. I set up an eBay search for a yard of Marrimekko cotton fabric and snagged a great multi-tone yellow swatch for under $10. You don't need much - I bought a yard and have plenty left over.
In addition to an old frame canvas and a yard of the fabric of your choice, you'll need an Xacto knife, scissors, a staple gun, and a canvas stretcher (I ended up not using this, but if you have a thick fabric a la canvas you'll need it).
Start by slicing the canvas off of the frame with an Xacto knife. I didn't even bother to pull out the staples, so I sliced just along the edge of the frame with the canvas facing down. (This also lets you save the print for sentimental purposes - in my case, to put back into my parent's basement.)
Next, you'll need to line up the now-empty frame to the fabric. I played around until I got the layout just right and cut around the frame leaving ~2" excess for folding over the frame. Next, line up the base of the frame with the straight manufacturer's edge of the fabric to keep it even, and put a staple in the middle and on both corners. Then, staple the opposite side after pulling the fabric taut (don't stretch it!) in the middle and both corners. Repeat for both sides, and then fill in the remainder of the perimeter with staples paying extra attention to the corners.
Voila! Now hang it to a wall and enjoy your handiwork.