Top and Bottom:

Every rug has a bottom and a top.  It has to do with the way it is woven.  A rug is woven, whether on a horizontal or vertical loom, from the bottom to the top.  So the bottom is woven first, and the top is finished last.

An easy way to tell which is the top and which is the bottom in a finished rug, if the design doesn't give an indication, is to run your hand along it from top to bottom.  The pile will fall smoothly from the top going to the bottom, much like petting an animal.  In the opposite direction- from bottom to top- your hand will meet with some resistance.  It won't be able to pat it as smoothly.  Rugs should always be hung from top to bottom as this allows more support.  Also, the colors of a rug can look different from one end or another.   From the bottom, the colors look darker than from the top- this has to do with the way the pile is picking up the light.  So, if a carpet dealer asks you to come to the dark side, you'll know what he's talking about.  

Fringe:  

Fringe is naturally found at the bottom and top of a rug.  It is usually made up of the warp ends which are tied off or finished after the rug is cut off of the loom.  By looking at the fringe, you can usually tell what the warp is made of.  Often the fringe on the bottom of a rug is longer than on the top because in some areas, there is no warp allowance left for fringe at the top.  Fringe can also be easily added, but if it is, make sure it is done so skillfully. 

Selvedge:

The selvedge of a rug can give a good indication of where it was woven.  Different weaving areas use different treatments for the selvedge. 

The selvedge is often one of the first things to wear out on a rug.  Because it is the edge, it receives a lot of wear and tear.  Therefore, it's good to know that you can rewrap the selvedges easily, using a needle and thread and a wool yarn which matches the color of the rug.