Last year, one of the things I made for people I love was altered books. (That's the "official" term for them; I don't know its original source.)
I start with a sturdy hardcover book that I'm not interested in keeping as part of my library; most of the time that means an outdated textbook of some kind, or a textbook that had inferior content in the first place. I have a lot of those around, because I've been asked to review so many textbooks over the years, and because I acquired quite an assortment of textbooks when I was homeschooling my children and preschooling some of my grandchildren. (If you don't have a supply on hand, outdated and/or inferior textbooks are easy to find at used book stores and yard sales for almost no money at all.)
I go through the book and remove maybe a third of its pages, evenly spaced -- that is, I leave several pages, then tear out several pages, then repeat. You have to do this, because the process of altering the book means adding all sorts of things to its pages, and that makes the pages much thicker than they were originally. You have to take out a batch of them so that there'll be room for those bulked-up pages when you're through. Then I glue the remaining pages together, two or three -- sometimes more -- at a time, to make them sturdy enough to carry the materials I'm going to add.
At this point I have to skip ahead and explain where I'm headed, so that the description of the steps I take to get there will make sense; here goes....
A finished page
A prototypical finished page in the altered book is going to first of all be a collage -- maybe a collage that makes a picture of some kind, maybe an "abstract" collage. I use fancy papers, candy-wrapper papers, bits of fabric, bits of ribbon or lace, buttons, all kinds of things, and glue them on with archive-quality gluesticks. I add a family photograph to be the central element on the page; I add a scrap of paper cut out with a pair of those scissors that make a fancy edge as you cut, with the necessary information written on it. (Things like who's in the photograph, when and where it was taken, and any sort of relevant comment.) This is a perfect way to use up your collection of family photographs that aren't good enough to put in an album because one of the people in the pictures has closed eyes or some such thing; you cut them up and use only the good bits for your altered-book page.
And then the last thing I do to the page is "age" it; I take some water and a brush and a tube of acrylic paint in some appropriate color -- dark brown is my favorite -- and I go around all four edges of the page with a very thin wash of that paint to give the page an "antique" look, and I let it dry, propped open on some newspapers. (This takes quite a while, since it has to be done one page at a time.) It doesn't matter if this border is uneven, or if it leaks over onto the page once in a while; when the page is dry, that sort of thing will only make the page more interesting to the eye. [You might not want to do this step, obviously; it's an effect I really like, but it may not be to your taste.]
Getting to the finished page
I try to pick out all the photographs and collage materials that I'm going to use for the book before I actually start assembling it, so that I'll have a rough idea of how many final pages it will have. If you don't do that, you won't know how many groups of pages to glue together. Suppose you only have twenty photographs that are suitable for your book. Then you'll want to glue groups of pages together so you'll end up with at minimum ten pages that have one of your photographs on each side -- plus the inside cover pages at the front and the back of the book, which will be decorated, and will have written on them things like holiday greetings and "from X to Y" and the date of the gift, but probably won't have a photograph. I say "at minimum" because you may want to have one or more pages for something other than photographs -- a favorite family recipe, for example, or somebody's report card, or some other chunk of memorabilia. When the book is completely finished, I do the borders of paint around the edges of the pages.
Doing the book's cover
I glue bands of some sort of appropriate fancy paper -- "scrapbooking" papers are excellent for this purpose -- over anything on the book's original cover that needs to be hidden, like the spine of the book, and any other area where there may be printed words. I add a new title on the front of the book using letters that glue on -- either the ones you buy in sheets, that are like stickers, or ones that I cut out myself. Then I go over all the glued-on bits of paper, and the whole area where I've added the title, with Mod Podge. Mod Podge goes on white and opaque, and it protects the material under it the way laminating it would; it dries clear and transparent. It's magic.
Sometimes -- if I happen to have a large number of items from photographs available -- I do roughly the same process on a deck of cards instead of in a book. I start with an ordinary deck of cards. If the cards are heavy and sturdy I use them just as they are; if they're lightweight cardstock I glue them together by twos or threes to get a sturdy enough base to work on. I glue the photograph (or item cut out from a photograph) on one side of the card, and on the other side I glue a piece of paper -- cut with the scissors that make a fancy edge -- on which I've written something about the photograph. If there's a lot of empty space on the card I collage it before I glue on the photo and the comment; if there's only a thin edge I just "age" it with the acrylic paint and let it dry. Finally, I crochet a case for the completed deck, since it will be too thick to go into its original box. If you don't crochet, I'd suggest using a case intended for a cellphone or a PDA or something of that kind; it's easy to find one that will fit the deck of cards.