My wife has one of these Epson all-in-one scanner/printer/fax things. The scanner software is smart enough to detect if you have multiple images on the flatbed and separately crop and process them. Your own scanner software may vary, of course.

My advice: scan whole pages at a time, possibly removing the plastic if and only if it's not glued down such that you can't remove it in a non-destructive fashion. You don't need terribly high resolution, but if you can get 16-bit TIFFs instead of normal 8-bit images, that will be a big bonus for you later on if/when you want to do image cleanup.

Then, once you've got your pile 'o pictures, you've got two important tasks: metadata and cleanup. You need to get grandma to actually look through the pictures and tell you who everybody actually is. For cleanup, I'd say to run everything, in bulk, through something like Picasa's "I'm Feeling Lucky", and save Photoshop for the good ones where you really want.

Ancient black-and-white will actually come out quite nice. The nasty, awful pictures are the ones printed on early color paper (1950's or so). Those are all faded and brown. I recently put some serious Photoshop energy into cleaning up a few of them. Auto-Levels gets you close, but surrender on getting any useful shadow detail, much less decent color balance.