I'm writing this as part of my 'Tried It!' series. However, to be completely honest, I have been using and reusing this tutorial for a couple years now. It's just that awesome.
I've been able to make myself several scarves and whip up inexpensive last-minute gifts for friends. It has yet to fail me.
The original tutorial that inspired me was by Yours Truly, G (it comes with a handy-dandy and oh-so-necessary video as well). Here is how mine turned out:
I would add that G's tutorial gives you specific measurements for the scarf. However, once you get more comfortable with the pattern, you will find that many different sizes of fabric will work and that you can use the same method to update existing flat scarves. Scarves can also be made to wrap twice or thrice around your neck depending on the width and weight of the fabric. Play around and find out what works best for you..