I have done this a couple times before and love the finished product. I can make the skirt however long I want it and it is an inexpensive way to get a new skirt! I am not going to go into details about the "how to do it yourself" because I'm not that good at sewing and giving directions; so I will just post links at the bottom of the post that give detailed directions. I have included some pictures during the process, it is very easy. Trust me, if I can do it, so can you!
First I ripped the inside seams of the legs.
Then I rip the seam out a little way up the back side so it will lay flat. I do the same in the front but forgot to take a picture.
Then I cut out a piece of fabric to roughly fit the opening. I pin the material where I want it, trying to get it to lay flat and smooth. I recommend trying the skirt on to make sure it will hang okay. I have had to reposition the seam near the back pockets before to make sure it lays okay. I then just sew them together, trim the excess material and strings and repeat the process for the front opening. Really technical advice there isn't it.

Here's the finshed project. I am not a professional seamstress and know very little about any technical terms or how to actually sew properly. I just do the best I can and don't expect it to be perfect. I don't worry about finishing the edges inside the skirt either, no one is going to see it and it doesn't bother me. This time I used a dark blue flannel material I had on hand. I have used jean legs from another pair of jeans before when I've done this. If you've never tackled this project because you thought it would be too hard, I encourage you to give it a shot. It is easy and well worth it to me. I started this yesterday afternoon, worked on it when I had time and finished it this morning. It really doesn't take long at all. Oh by the way, I love to find jeans that are just the right length because then I don't have to hem the bottom at all!
Here are a couple links with more detailed instructions.
http://www.notmartha.org/tomake/jeanskirt/
http://sewing.about.com/od/adultclothingprojects/ss/jeanskirt_3.htm
Blessings,
Rashel