So far DD (6 years) is our main artist but DS (2 years) has started producing his own work too :) We keep a few special pieces for their boxes but mostly I photograph and recycle!
As stuff gets created at home or comes home from school it goes on the fridge for a few days then into a cupboard. We sort through this every few weeks & recycle most of it, keeping the bits DD likes best. Any 3-dimensional creation involving food containers that comes home from school is photographed and recycled fairly quickly!
By the end of the school year we have a big pile of papers, even though we keep whittling it away throughout the year! Then we photograph all of them & the pile goes into the recycling bin. I also go though her school books and take pics of any special pages. Then I make up a photobook online, just a small 8x8 spiral bound one, and get it printed up, it's fab, you can put an entire year's worth of art into one lovely little book. So far we have one from playschool & one from Junior Infants (1st year of school), DD loves them, she looks through them a lot & loves to see her work in a real book :)
Our kitchen/everything room has a lovely fireplace & above it we have hung several frames in which are hung some of DD's drawings. We rotate them out every so often, she gets to choose what goes in them. And a few more can be seen on the noticeboard & fridge - also rotated frequently.
I digiscrap so I include their artwork in layouts and as part of events, sometimes if we have no photos from an event then DD's drawings take their place in a layout. She loves to see her art scattered in among all the photos on each page. Sometimes I'll do an entire page about her work - I have a lovely double spread capturing the first time she drew all of us individually in all our potato-person-like glory!
Erm.... think that's it, she also sticks her artwork on her bedroom wall :)