P.W.
Oh, I love this question, because I have a really hard time throwing away things my kids make.
Here's what NOT to do: feel like you have to have a nicely organized scrapbook. I did that and ended up with stacks of paper waiting for me to put them in an album, and 14 years later I still have a big trash bag of stuff in my closet.
What I finally did was get bins for each of my kids. I call it their memory box. When they make something I want to keep I PUT THEIR NAME ON IT, and DATE IT. Very important. Then I immediately put it in the bin. It is also good for keeping special toys or loveys or awards they win.
In that trash bag that is still sitting in my closet most things don't have names or dates, so now I don't remember which kid did it, or when (and I thought I would). With the memory box method, if you're not sure whether to keep or toss something, just keep it and you can go through it when you're an old granny.
And in terms of what the kids love -- they haven't cared about their past as much as I have but so far I think they like to see certain old toys they used to play with a lot. I kept the first Thomas the Train (Stepney, he was called), that my youngest son ever got, for example. There was no way I could keep them all.
And p.s. by the time they get to high school there is very little they make that is worthy of keeping, unless they are unusually artistic, and a lot of stuff never makes it home, so you don't have to worry about a never-ending stream of keepsakes.
And p.s.s. keeping these things can be very helpful - when my daughter applied for a paid camp counseling job this summer, there was a lot of competition for a few positions, but I went to her memory box and pulled out the award certificates she had received for being most enthusiastic, etc. the previous two years as a counselor-in-training, and she submitted them with her application. She got the job.