There's a Wall Street Journal article today (Jan. 31) in the Personal Journal section on this exact topic, in which it says that many people are using scanning services to scan old family photos. They mention Shoeboxreprints.com as one service, which will scan as many as 1,000 photo for $49.95. Others listed include Britepix.com, Digmypics.com, ScanCafe.com and Scanmyphotos.com. Most of them have resolutions of 300dpi, Scancafe is 600 dpi. Prices are all over the place, with a high of 49 cents per pic. I'm a little nervous about letting my pics out of my hands -- maybe I'd send them a third, spread over the years, then another third, and then a final third...But if you have a lot of photos, and they're only for family use, a service woudl save you a major pain in the ass...
The journal article also quotes a couple of people who had the service done at a local store, so you might check the yellow pages...
JC