Difficulty: Medum to easy.
Creating a rug using Mental Ray is easier than you'd think.
People prefer to use V-Ray to do this, but Mental Ray can give good results.
First find a bit of frayed fluff from a carpet and cut if off.
Then take a photo of it on an white background using Macro mode on your camera or phone.
Edit out the white and enhance it until you get a result you like. Also create a separate alpha map (gives better control than relying on the alpha channel in Mental Ray).
create a simple crossed billboard geometry and a material. I used a Standard material with the diffuse channel and the transparency channel using the respective textures. I've sliced it to allow use of frizz on the hair.
Apply the Hair & Fur modifier to a rug model and use the object as the hair reference. The edge is angled, not flat, to allow the edge of the rug to flay out.
The Materials are applied like so:
The poly count in your scene will now be massive, It would be a good idea to use a Mr Proxy object to capture the model and use that in your scene.
(convert the hair to mesh before creating a Mr Proxy)