M.H.
Here are my comments:
1. www.name2host.com, it's about $35/year (domain & hosting incl), or was, and that's it. you can upload your stuff with an ftp software, if you know how to do it yourself.
2. lulu.com for self publishing your own book of all your photos. I haven't tried it yet, but it has great reviews and is listed as a top self publishing website
3. Google.com, you can have up to 1gb+ of photos on there. Not sure about journal stuff, but you can post comments under each photo.
4.On the parenting section at ivillage.com there is a photo journal you can make. I tried it a long time ago, and it didn't seem all that great. But maybe it is better now.
http://parenting.ivillage.com/baby/babyphotos/topics/0,,7...
Others: I like Flickr and the kodak gallery, your family can post comments if they want. Or check out the journal sites, like blogger, livejournal(prev. mentioned)
Of course if you use apple, you can use iphoto to export a web page of whatever pictures you choose.