For the past three years I have been creating a digital scrapbook of that years photos. It works better for me than traditional scrap-booking because I don't have photos, paper, stickers, and markers laying around for the kids to get into- and there is never any mess to clean up. I also think it looks a lot more "professional", especially when it comes to the lettering.
I currently use Adobe Photoshop Elements 6.0. It is somewhat time consuming- it is not uncommon for me to spend an hour on each page, but I really like the freedom to lay out everything just how I want it. I usually start with a background image that looks like scrap-booking paper, add the photos with shadows to make them pop out, add some lettering/titles, and maybe some decorations. For me it seems like the cost of digital scrap-booking and conventional scrap-booking is similar. I also like digital scrap-booking because you can use the same image over and over again, changing it to your exact needs whenever you please.
I have been using www.shutterfly.com to print out my hard cover 12 x12 photo albums. It's a great way to share all your favorite photos with your friends and preserve them for future generations. Here are a few of my favorite pages from this year. If you have any questions or comments, I would be glad to hear from you!