For the past couple of years, I've made photo calendars for the members of our extended family. The first year, I had empty calendars from Stampin' Up. I had to stamp in all the dates, months, birthdays, and holidays. It took a while, but I started in May. I also had to glue in paper and pictures on the blank pages.
The past couple of years, I've used make your own calendars from Michaels. All I had to do with these ones is add pictures and birthdays.
I've considered using online sites like vista print or snapfish to make calendars but haven't yet. The upside to using an online calendar maker would be less pictures to get printed out, less adhesive to buy, and less time putting pictures in. The downside is less variety (if you give duplicate ones instead of making unique ones). I'd have to pay shipping, but I could ship it directly to the recipient.
As far as what kind of photos to use- I've always gone with pictures of the kids and cousins. A family reunion could be a great place to take calendar photos of everyone. Use people's photos on the month of their birthday. You could also ask members of your family to send you digital copies of photos they've taken. I've also included funny quotes from the kids and I've also had them draw pictures in them as well.