Two words: Photo books
MAKE them a photo book online with digital photos. Not only will it become a one of a kind brag book for them, but you can write it simply and in such a way to thank them for all they do and tell them what they mean to you.
Most grandparents now a days don't seem to really "get" the digital/online photos. There are tons of photos of their grandchildren "out there on the web somewhere" that they don't know how to access, print and show their friends.
Photo books are an amazing way to make a "real book" that doesn't involve glue and photos falling out all over the place.
Next best choice, a digital photo frame with an extra memory card. Give them the preloaded frame with pictures and a thank you card. Then every month send them the "other" memory card to pop into their frame. It will have the most recent pictures. They can send the 1st card back to you to be refilled for next month.