Knitting with big bundles of yarn is very different from using up the single skeins. For one thing, it's dreary to make more than one or two biggish projects from the same yarn, so ideally, you should get rid of each yarn in one go. Try to finish each project with no more than a ball left at the end. The great part about knitting with the big lots of yarn is that you clear out a lot of space with each project! To that end, here are some ideas:
1. Give away or sell the yarn. Lots of the same yarn are are much easier to sell or even give away than little random odds and ends.
2. Double your yarn, double your fun! Knit with two strands from two balls, or put together the inside and outside ends of one ball. Of course, change the needle size as needed. The Brea Bag was knitted double, and it was super-fast!
3. Felt if you have felt-able yarn. Felted objects suck up a LOT of yarn, because they have to be made huge initially. They're also pretty fast, because usually it's all in plain stokinette stitch. Plus it's fun to see them turn into normal-sized things at the end. My needleholder didn't felt down too much, but still it used up a ton of yarn.
4. Non-garment household-type items knit up fast, because there's no shaping. Some ideas (warning, some are Ravelry links):
-bathmats: crocheted--Snow Bobbles from Miss me knits--or Knitted--Absorba the Great Bathmat from Mason-Dixon Knitting
-rugs: one with matching cushion from Vintage, felted one from Valley yarns, crocheted from Blue Sky Alpaca. Make one for picnics!
-pillow covers: Argyle felted pillow from Knitpicks
-felted boxes, baskets, or bowls: Nantasket basket, Felted bowls from One Skein by Leigh Radford, Box from Mason-Dixon Knitting
5. Sweaters--remember those? If you have too much yarn, try changing the pattern to a sweater coat, or if you have too little, change to a vest or tank top. Even a small big bundle (2-3 skeins) is enough for a sleeveless top.
6. Crochet takes up a lot more yarn than knitting. For ex, my cable crochet blanket turned out a lot shorter than I expected. Also, crochet is easier to leave sitting around open to pick up and work on intermittently, because there's only one loop to worry about. And if you mess up, it's easy to rip out!
7. If you know how, do double knitting and incorporate some fun designs while using up twice the yarn.
8. Do a small project at the same time to keep up your spirits!