DIsney has some professional photographers in the parks, at prime locations. (In front of Cinderella's Castle, places like that that just SCREAM "Photo Op!!") They'll take your picture (sometimes inserting something cute, like Tinkerbell into your outstretched hand) for free. They'll give you a card with a bar code on it. (You'll only need one card per trip, though you can certainly double or triple up if you choose.)
We pre-ordered the Photopass CD for $99, as opposed to the regular price of $120. I started a share with my sister and my friend, both of whom were going to WDW within 2 weeks of my trip. (That meant we each chipped in only $33 for the CD.)
When we returned, we inputted the code numbers on the card into our account. We edited our pictures-- sometimes adding borders or inserting a character into the corner. (doing so does NOT lose the original; it merely adds to the number of pictures on the CD.)
When everyone was done editing, we ordered the CD, and my husband made copies for my sister and my friend.
I wasn't comfortable sharing pictures of my kids with strangers... I think I'm a bit weird that way.... so I didn't do one of the shares here. But lots of people do and find it a way to save money. This year my sister is once again returning at about the same time as us; our trips overlap by a day. So, unless I can find someone else I know going at about the same time, our Photopass share will cost us each $50 this year...still a bargain in my eyes.