There are common sense rules when it comes to dealing away an unappealing gift that was dealt to you. For starters, you need to spin your turd of a present outside of the friend or family sphere from whence it came. Witnesses to the regift who are aware of its origin can only mean trouble for you down the road.
Learn from my mistake. Many years ago I was given the ugliest earrings ever known to woman. But I mistook unattractive for worthless and only after I passed them on did I discover they were actually rather valuable. DOH! My bad!
I can't really imagine saddling anyone I feel is worth giving a gift, with something I've rejected outright for myself. My hideous gifts - and there have been few - go to Goodwill or The Salvation Army. And in this age of gift cards, there's just no need to buy someone something that isn't to their taste. I read a so-called "gift guide" that labelled gift cards thoughtless and tacky and I had to laugh at the author's ignorance! I've never seen anything but glee on the faces of gift card recipients, including my own. As long as you can get the store right, you also know your gift won't get spun off to someone else.