Most people have a digital camera or at least a smartphone, so this issue is of general interest.
As an example I own 3 PCs, 5 external hard drives and 6 media devices (cameras, phones, camcorder etc.), but organizing media (in addition to professional files), synching and backing up everything may become as a second job.I am posting this after a long time reading, asking, thinking and trying. It may not be optimal for everybody, but it has been working fine for me for the last 3 or 4 years... and will update this post if the situation changes.
Media supports
If you still have drawings, paper photos, vinyl records, magnetic tapes and similar, definitely go for digital.
Once you have files you can always put them all together and as time goes by, copy them on a larger, cheaper medium: they will remain intact as after digitalization. Beware of changing format if you do not know what you are doing, because you risk to compress with data loss or re-encoding, loosing precious information (image/sound quality).
Faithful digitalization is a major issue, which will not be dealt with here.
So, in general, our memories are digital or can be digitalized, so we end up with a huge amount of files.
Organize your digital media files
How to organize them on your computer or external hard drive?
Sort by date
I think that the chronological order (e.g. by date) is the best. If we make sure that your camera, mp3 reader/recorder etc. has the correct time and date set, then your photos, videos and audio files do not need the time-consuming activity of classifying them into folders for each event or moment of your life or person or place (as I was tempted to do at the beginning).
If the file date is wrong for some reason (incorrect copy/backup, file changes/retouching, device without date), you need to remedy by renaming it in the format yymmdd (or YYYYmmdd if you plan to make your method last for generations), e.g. 080317 for March 17 2008.
Automatic sorting by retrieval
Programs like Windows Photo Album or others that come with your camera are free and in the future will become more powerful and easy to use.
Picasa has a face recognition function, so will do the search of people and classification of pictures for you.
If the file date is correct or at least it is included in the file name, you can always sort all your media from different folders/devices by date, so you will find again your past life, without the need of manually look for files.
... and sort by device
I use the folders photos, videos and music as proposed by Windows.
For each medium type I create a subfolder named as my devices: eg. Nokia6680, SonyEricssonT715, NokiaE63, Treo650, Visor, SonyDSC-W360 --> under photos or videos; SonyD8 or Everio --> under videos.
Some cameras come with their own backup software, so you do not need to set anything. Just make sure that all files are in a defined location (PC folder) and that location is included in your regular back up location.
Classifying your files by device is more efficient for backup.
Music digitalization
Instead I classify my music by author, and use the automatic ripping function of MediaPlayer for all my CD collection. That is incredibly easy and completely automatic. Just insert your CD and load it in your music library. In a few hours you can digitalize a large CD collection. Author information are taken from the Internet and under music subfolders by author and album name are created hierarchically.
Backup your memories
If you are saving your memories to enjoy them when you will be retired or to share with your grand children, you will need a safe location.
I do not trust Internet backups (like Picasa, Dropbox etc.), although easy to use, inexpensive and worry-free, for privacy reasons: you never know.
Backup supports
To choose your preferred backup support you need to compare the cost per GB or TB of data.
At this time 1TB hard drives cost about 1euro/GB, so they represent the optimal size. Memory cards are still more expensive, slower and less reliable in the long term.
For redundancy I have 5 backups on different hard drives in different locations.
If one hard drive fails, it needs to be replaced and all them need to be constantly monitored, because retrieving data from a broken hard drive may cost a thousand euros.
Never use CDs or DVDs because their life is limited to a few years and can be easily scratched, loosing your precious files.
Tape backup (like DAT) would be very reliable (tape kept dry and at constant temperature are stable up to 60 years and have no moving parts that can be damaged) but reading devices become quickly obsolete so retrieving data from professional services may again become very expensive.
Backup software
After trying several programs, I regularly use SyncToy2.1 for all my professional and personal data, a small, efficient, free Windows add-on, which shows a preview of changes before running.
I make a profile for each device (e.g. camera or phone) and hard drive (e.g. AcerPC, Lacie, ProDrive), but have the option to run several at the same time, by connecting more devices and external hard drives at the same time.
It is a good practice to define a master backup location (e.g. your home PC) where you make all your modifications and then sync all other devices, so that you do not have to track what was your last updated backup location. For instance I have photos and music on my PC, because they are only 10GB each, but have a master external hard drive for videos (about 300GB).