http://en.wikipedia.org/wiki/Schnibble ...says its a 1994 French adventure game and story. THAT's not very quilty!
http://www.missrosiesquiltco.com/Schnibbles.html ...says it comes from a German word, and means a small scrap of fabric. THIS is sounding better.
http://www.urbandictionary.com/define.php?term=schnibbles ...offers four definitions. The first two refer to small bits of paper, and indicates the term sounds German, but alas, it is not. The fourth refers to stray hairs that stick out of a ponytail. The third definition is X-RATED! Who knew??
Miss Rosie wins in my book! But I still don't know why people find them so addicting. If you are a shnibbler, perhaps you can enlighten me? :)