My mom did this with my stuff, and when I got out of college, she loaded 8 huge storage boxes of stuff into my car and said "its yours now!" Then i had to wade through it all - I still have 3 decent sized boxes in my basement. I kept report cards, projects I remembers and loved doing, greeting cards form birthdays and special occassions, and photos, and awards, definitely not regular everyday assignments,worksheets, etc.
I would say digitize it - keep only very special things, and then take digital pictures of the rest and put them on Photo CDs to keep - will minimize clutter, but still keep the memories.
Good Luck, mine are 3.5 and 1.5 and I already find myself keeping things - special outfits, favorite rattles, and first scribbles, etc! It is hard not to get sentimentally attached to things, I think it is a natural human tendency.
Jessie