Using photos they took and simple text, they put it all together at Shutterfly. If you have a Mac, there are also easy options through iphoto.
Now I'm thinking that I'll co-opt their idea for our upcoming trip and take photos with a story in mind: packing suitcases, leaving the house, at the airport, etc.
It's such a fun, personalized gift that little ones will admire over and over. And in the case of family vacations, you can make multiple copies to share with all branches.