I have started mine with my husband. I have so much on my side of the family but had very little on his and when things started flowing with info I stopped everything to put his together. I am still in the progress of putting everything together of my family and have notebooks for each parent and grandparent. No way am I organized but I am getting there. The binders are put together and what relates to that person is in sleeves and on cardstock paper. As I find new information it is easy to find the time frame and put in the approriate place. I am finding also that paperwork doesn't have to wait in a file or folder, this is very convenient and also has let me realize when I have duplicates of the same info I can literally share with others.
I use regular school notebooks. Cover with fabric and decorate the outside - I try to keep the theme of this with the character and traits of the person it includes.
I start with a grandparent and then do their parents and their siblings and then work my way back. I am almost finished with my 3rd album.
I heritage scrap 8 1/2 x 11 and have a notebook for each surname that also contains documentation starting with the furthest generation back and working forward.