Before my son was born, I just backed up everything on my local server, as well as one of my webservers. Since a few of my close friends now have children, we all host local backups of each other's photos. We started that after a friend had a house fire and lost all their photos stored on a local server.

I also do a yearly photobook with DVD(s) for my son. The photo book has the best pictures, with the back story for each. The DVD(s) has all our family pictures and videos worth saving for that year. I send out copies to my son's grandparents and great grandparents.