As a mother of a toddler, and another on its way, I hate throwing away my child's artwork so I end up saving it in a folder. I also try to think of creative ways to display it (besides the old adage of taping it to the refrigerator). Here are two things I've come up with:
framing the art
(2 frames for $1 at ikea!)
Scored these giant paperclips from Homegoods and just added picture hooks on the back
Here's a few more for inspiration.
Great for more than one kid, or large wall space to spare.
I personally think the book is a great idea someday, once he's older and I can pick a few favorites from each year of childhood.