Hi
I have done scrap books, I wouldn't know where to start with a computer album! Also, most of the photos I wanted were hardcopy, and I'm useless with scanners etc!
There's a great book that was recommended to me for lifestory work, and I used it to create the scrapbooks. Its by Joy Rees and called Life Story Books I think. It starts with the present and works backwards, which apparently is much better for the child. Ends with the now then the future, so the tricky stuff is sandwiched in the middle of the better bits. I suggest borrowing/buying it and having a read
I would recommend getting a book which you can add pages to, has room for lots of writing and pictures, and not computer. Mainly because computer software is so constantly updating the program you use could be reduntant in 3 years time. Plus sods law says the time when she wants to look at it, is the time computer will have crashed, or be off for repairs etc. And personally I'm not good on computers and very good with books!
Their books start with a lovely picture of them, and their first name. They chose the butterfly stickers themselves to stick on, very decorated. It goes on for a few pages about their interests, hobbies, and that they live with their mum Lilka, siblings x and x, go to school x, like doing this. There is a (adoptive) family tree etc. Then it goes back, along the lines of they live with Lilka now but when they were born they lived with x. They were born in (place) at x hospital, and weighed x. Nice full face picture of their other mum. Then the tricky bits watered down age appropriately about their earlay life and about being taken into care. Goes through FC's. Then goes to homecoming day, new house, meeting mum, those bits so you are back to the present again. Ends with 'in the future x wants to be a xx'
Every so often I go back to the book, and take out certain pages which are outdated, like interests, and put a new updated one in. Put a new photo in the front etc. Add bits in where needed
DD2's last page used to say things like 'She wants to be a vet/teacher/dancer when she grows up'. Nowadays its along the lines of 'DD2 would like to have a big house, and be a WAG when she is grown up' 
[despair!] Although she changes her mind every ten minutes, so hopefully very soon WAG aspirations will be out of the window!
Hope that helps