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DaveI use an HP 3970 ScanJet, which isn't still a current model. It has been replaced by the HP 4370. I paid $99 for it at Best Buy, I don't think it was on sale. I use its bundled software to take the scans (2x, 200 dpi).
I use Microsof Picture It Photo as an editing program. It is really limited when compared to something like Photo Shop, but it is pretty easy to learn. When it comes to cards, I don't want to touch-up or enhance any of the colors, so I'm just changing size and compression on the file.