I made this traditional Swedish Heart to hold a tiny Christmas present. It measures almost 4.5-inches square and was made using two 2.5 x 8 inch pieces of felt -- one white, one red. I refreshed my memory of how to make the Swedish heart using the book Christmas Customs: Handcrafted Ornaments published by Creative Publishing International of Minnetonka, MN in 2001. The book appears to be out of print, but it is available for the cost of shipping from sellers on Amazon. There are also directions online as Woven Heart Basket on First Palette: Your step-by-step guide to kids' crafts. This site gives a good guide on the actual weaving process, which is a little tricky until you have practiced a few times.
To create your heart, you may use: paper; or fabric stiffened with iron-on interfacing, or two pieces of fabric adhered with a bonding medium like Stitch Witchery; or any kind of felt, as I did. Basically, you cut two rectangles in a three to one proportion, fold the rectangles in half and cut two or three evenly spaced slits in the rectangles about 2/3 of the way from the fold to the open ends. My 8-inch long rectangles had three slits spaced 5/8-inches apart and measuring 2.5 inches from the fold to the end of the cut. Weave the folded rectangles together (refer to the online guide at First Palette) and round the tops of the rectangles with scissors to form the shape of a heart. You may attach a handle of ribbon or cord to create a hanging ornament, or a basket.
Instead of attaching a handle, I wove a 30-inch piece of 1/4-inch wide ribbon through both sides of the heart and tied the open ends at the top where they emerged. I lined the basket with a small piece of gold mesh and trimmed the mesh to conform to the shape of the heart.
After Christmas, I will show you what was inside the heart!
UPDATE: January 6, 2014
Here is the Troll Bead sterling silver Swedish heart that was tucked inside my felt heart.
UPDATE Dec. 28, 2016: Instructions on "How to Make a Fabric Swedish Heart" on Bernina website We All Sew.
Creative Publishing International, http://www.creativepub.com
Handcrafted Ornaments/Amazon, http://www.amazon.com/Handcrafted-Ornaments-Christmas-Creative-Publishing/dp/1589230116/