Upcycling is a term (and I use "term" loosely) that was coined in by William McDonough and Michael Braungart in their book Cradle to Cradle: Remaking the Way We Make Things. In their book, McDonough and Braungart claim that to reduce potential waste material that is a good idea to make use of said waste material as a new product without the additional expense of recycling. Upcycling is nothing new, and it's not a new way of actually doing anything, it's already an important middle part of the Three R's (Reduce, Reuse, Recycle) - reuse. It's a fake and I don't buy it. The part that we're missing about the importance of upcycling is that the word has gone viral, meaning it's not popular quite yet and it's still pretty cool to an exclusive few who are in the know, but again, it's nothing new and has simply replaced a GenX term. But, I strongly urge you to know what the word upcycling actually means before using it inappropriatly. According to the Sustainable Dictionary, upcycling is "[t]he process of converting an industrial nutrient (material) into something of similar or greater value, in its second life. Aluminum and glass, for example, can usually be upcycled into the same quality of aluminum and glass as the original products."
Reusing products and materials are already out there like using that old pair of underwear as a household rag, wearing your grandmothers wedding dress, or reclaimed lumber. There are also several websites popping up like Upcycle Canada (upcycle.ca), which if you were to just use your common sense that it would never be there. It's also already in mainstream industries, like Freitag, who since 1993 has been using old truck tarpaulins to make their products (pictured).
So I have to say that this whole "upcycling" thing is simply just a new word for old tricks.