I agree with much of what's already posted.
I'd have the kids go through the pics and choose their favorites (you, too!). Only use those.
I'm a big fan of Simple Scrapbooking. The use of color blocking and minimal embellishments will suit your budget nicely. Then, you can get a nice cohesive look throughout the album.
Be sure to copy your favorite pages for yourself.
Don't go overboard. It's a big project but well worth it for your kids and yourself. Slow and easy and you'll be extremely happy with the results.
Good luck and have fun!