This four minute video shows you some of the future of clothing recycling:
Here's an article on the same topic from the International Herald Tribune.
This quote shows you some of the potential of new innovations in recycling:
"For the production of a pair of jeans for example in which 50% recycled fibres are used, 25% less energy is required in the production process. Almost 50% less water is used, because there is no need to grow virgin cotton. Moreover around 40% fewer chemicals are needed, predominantly pesticides that are used in growing cotton."