I think first, decide how you want to keep them.
I use the plastic photo holder pages. They're safe, and it's easy to change around the photos and the pages, or add more. I keep mine in large 3 ring binders.
As for sorting, start by separating them into years, then into subsections like: just family, picnics, holidays, vacation, and so on.
After separating by year, decide if you want them to stay by just year or by "events". You can make as many different books as you want, 3 ring
binders can be bought at dollar stores, so the cost is kept at a minimum. You can start with the earliest and work up, one year after the next. Or
decide, one book, or section (use school subject dividers), for vacation photos, one for Christmases, weddings, other holidays, one for each child (and watch em grow), one for friends, and one for just family by the year.
This way, if you need to find a picture of someone, or something, (the couple we met on vacation in Florida), you know right where to look for it.
Good luck with your project.