hey manish... great that you care about the environment... i think the whole world shares your old plastic bottle woes... here’s a few things you can do with them:
1) cut them at the widest part and make colorful planters.
2) sterilize them in boiling water and reuse for storing water in the fridge.
3) make art out of it. check the links below for ideas.

http://asmita.instablogs.com/entry/junk-to-art-plastic-bottles-upcycled-into-gorgeous-lamps/

http://www.ecofriend.org/entry/boat-made-from-recycled-plastic-bottles-sails-away-with-a-green-message/

good luck with your endeavor.....

Hey Asmita,
Thanks for your reply and the links. However, I am not too sure about the point #2 in your reply, i.e. reuse them.
Have read and have heard that over reuse of these bottles may be harmful to health due to low quality plastic used used for these bottles.

Its nice to know that like most of us u too feel the urge and need to do something about this disposable plastic menace. I believe that the first step to curb it is to carry our own bottles of water where ever we can. Like I do keep a small water bottle in my purse or bag every time i step out of the house. this reduces your chances to buy one from outside the moment you are thirsty.

Secondly, as Asmita rightly pointed out a few more DIY kinda recycled uses.

Our Green blogoshpere is buzzing with lots of more innovative recycling ideas for the same.

It will be nice if you can bring to our notice too when you come across some outstanding ideas for used plastic bottles.

Thanks for your reply and I liked your suggestion of carrying your own water. Don’t create the problem so you won’t need to solve it, rite!
Though not possible all the time, but this is something we all can try to do whenever we can.

simply don’t drink bottled water. there is no magic secret trick. if everyone stooped doing what is bad for our future we would all be worrying about other things...

I agree with David, drink bottled water only when its absolutely necessary. bottled water is hardly different from your fresh water tap water. instead of buying bottled water carry your water from your homes where ever possible.this could solve much of your problem.