Where we live the local services seem expensive but our friends highly recommended this mail-in service, and we’re planning to do it after the holidays:
http://www.scanmyphotos.com/
You pay a flat rate to send a box of photos and the company will scan them all and return your originals along with CDs. It will save us a lot of time sitting at the scanner! Our friends said the trick is to stuff that box full. 😉
We have had great success with using our scanner as suzukimom mentioned…it has just been time consuming. I believe you can buy a photo scanner that moves through the pictures on its own, so I assume you can set it up and multitask a bit.