I recently did a heritage album for my mom and I used the original photos. They had been stuffed in shoe boxes for many, many years, and alot of them were not in great condition to begin with, so I felt like I actually saved them from further damage by putting them securely in an album. There were some that I needed to resize so I did copy those.
As for papers, My Mind's Eye has a collection called Wild Asparagus that I used and really liked. Most of my pics were from the '30s and '40s in Italy so that collection worked great. If you're doing more Americana, Cosmo Cricket has a collection called Early Bird that I just ordered (at the suggestion of someone here at sb.com -- always a reliable source!!) for my '50s pics for dh's photos.