Popular Mechanics has some ideas to reduce your Winter heating bill...
1. Plug the gap into your attic (shows pictures of how)
2. Stuff your Chimney (to block the inflow of cold air)
3. Upgrade your windows (or cover them)
4. Put a blanket on your hot water heater
5. Wrap your hot water pipes
6. Fill cracks and gaps in the house walls
Check out Popular Mechanics for a cost estimate on these ideas. Most pay for themselves in the first year.