Handmade for Gifts?

A lovely friend recently had a birthday, and I made her a cute wee gift.  As I handed the pressie over to her I had a sudden moment of panic.  Is it nice to give a homemade gift - or is it considered more worthy if I buy something? 

As the receiver, would you be happier to recieve something someone made for you - or would you rather they spent their time buying you a gift?  Thoughts would be greatly appreciated.

Thanks

Tilly xox