I think it is rude to re-gift and item. A person bought you something because they were thinking about you.
It depends on the item itself and how much thought went into it when the person was buying it for me. If it was something like candy, and I don't like the candy, I can easily re-gift that to someone else whom I know may appreciate it. In actuality I would probably just give something like that away, not as a gift but just for fun, such as bring the box of candy into work and shoot everyone an email that there's some candy over in the servery. If the original person who gifted it to me happens to come back over to my place and ask where the candy is, I will say that I ate it all. But if someone bought me something like a set of cookware, and they later came over and noticed I was using some other cookware it would be obvious that I regifted or returned their gift, and it would probably make them feel insulted. In that case I would likely just keep the gift and use it, even if it was not 100% the exact version of it I wanted, it's close enough and it was very generous of them to get it for me in the first place. Plus I would enjoy showing them how much I appreciated their gift by using when they stopped by to visit.
If for practical reason, I think re-gifting is acceptable. To make better use of the item given to you by someone else, you may want to give it to somebody whom you think would get the benefit out if it. It is like clothes that you have received but you couldn't wear for some reasons (i.e. not the right size for you) - so better give it to someone rather than keep it inside your cupboard. Of course, you have to consider the person to whom you will give it and the timing when you are going to give it. Being practical is not bad.
