My nieces have 6 kids and every time we send a gift, we get a fun thank you picture/postcard of their kids wearing or using the gift on the front. I also like to send cards as a hostess thank you for a special dinner, or as a means to send around fun photos from an event to all the participants.
Whether it is a personalized Christmas card with a year full of commentary or a quick thank you, photos cards are a great gift.
The greatest thing about photo cards is that you can create and send them directly to the recipient within just a few moments. I have a tendency to use iPhoto or Shutterfly, but most sites have a huge range of very useful templates that require very little effort. For the novice card maker, there are some good training resources on the web. You can learn more by watching the iPhoto Card video or go to Shutterfly's excellent How To center. Pricing for various services can be found here.
I love to make cards for Christmas, thank you notes, birthdays, and events like Mother's Day. Shutterfly and iPhoto are my favorite companies for making cards as their quality is very consistent and their workflow is very easy to follow. You can get cards within an hour by using some of the drugstore chains, which really helps out in a pinch, but just be aware that their color management and quality control is not as good.
Most of the software is very similar and I have provided some step by step guides for using iPhoto and Walgreen's and a link to Shutterfly's excellent site.