Sometimes you don't always know you want to encapsulate some UI functionality as a re-usable user control until after you've already started defining it on a parent page or control.

For example, we might be working on a form where we want to enable a user to enter shipping and billing information.  We might begin by creating some UI to encapsulate the address information.  To-do this we could add a <border> control to the page, nest a grid layout panel inside it (with 2 columns and 4 rows), and then place labels and textbox controls within it:

After carefully laying it all out, we might realize "hey - we are going to use the exact same UI for the billing address as well, maybe we should create a re-usable address user control so that we can avoid repeating ourselves". 

We could use the "add new item" project template approach to create a blank new user control and then copy/paste the above UI contents into it. 

An even faster trick that we can use within Blend, though, is to just select the controls we want to encapsulate as a user control in the designer, and then "right click" and choose the "Make Control" menu option:

When we select the "Make Control" menu item, Blend will prompt us for the name of a new user control to create:

We'll name it "AddressUserControl" and hit ok. This will cause Blend to create a new user control that contains the content we selected:

When we do a re-build of the project and go back to the original page, we'll see the same UI as before - except that the address UI is now encapsulated inside the AddressUserControl:

We could name this first AddressUserControl "ShippingAddress" and then add a second instance of the user control to the page to record the billing address (we'll name this second control instance "BillingAddress"):

And now if we want to change the look of our addresses, we can do it in a single place and have it apply for both the shipping and billing information.