I have been scrapbooking for 10 years now, and the best advice I can give is to get yourself a bunch of photo boxes (I got a number of them from Target a little over a year ago for $1 each). I labeled them for each child. My oldest daughter, 13, has 3 boxes. Baby, Preschool, and Schoolage. My son has 2, Baby and Preschool, and my youngest has 2, Baby and Preschool. I started from the youngest and worked my way up to the oldest. I also have a box for each holiday we celebrate, one for birthdays, one for family (that is just our immediate), one for extended family, and one for friends. I sorted the pics out by figuring what "theme" scrapbooks I wanted and went from there. Also, don't let yourself get overwhelmed. Do just 15 minutes to a half hour a night. If you are able to get a block of child free time (like a few hours) and want to jump on it, that is fine, but don't pressure yourself. It will get done, sometimes it just takes babysteps.
As for the school work and memories. I take pictures of 3D things the kids make for me, I save the cards, and will put them in the scrapbooks too, just make a pocket for the particular holiday and put them in it. For schoolwork, we only save one a month, sometimes less for the scrapbooks. We give drawings and such away to family members too.
HTH,
K.