My grandfather was combat photographer (and painter) in WW2, european theater.
We have a huge number of photo albums full of photos that he's taken. What would be the best way to preserve these photos and ideally scan them and put them online for people to see?
The main decision you need to make is what you want to do long term.
You can post them online, but they'll probably be lost over time. There's also the question of preservation if they remain in your family - how do you make sure these rare, perhaps priceless documents don't fall apart? You can sell them to a collector, but they'll become private and possibly not available for others to see. You could try and get them donated to the US National Archives, where they would be preserved and protected and made available to the general public.
I'm biased towards the last as a researcher who hits the archives up regularly and posts things online for people to read. However, it's not without its drawbacks. You lose ownership and control, and with the budget cuts, their staff for intake and processing of documents is overworked and things may take years to be gone through and made available.
I might suggest a hybrid - scan and post copies to a sharing site and THEN donate them so they are preserved for future generations.
Generally, for scanning, I would recommend 300-600DPI non-compressed images (I use tif) as "masters" (300DPI is print quality and 600DPI allows a better zooming in if desired, but might not be worth it if an image is blurry, etc.) I forward scans of ships I come across to Navsource for example, and scan at 3-600DPI but down-scale to 100 DPI or so before sending on so that it doesn't kill their bandwidth and storage. Still looks plenty clear on the screen....
More importantly, do you still have the negatives? If so definitely don't discard them. Offer them with the photos.
Scan them and put them online right now?
It's great that you want to share your grandfather's photos! I hope you share some of your photos to Reddit!
If the photos are already in archivally stable albums (so, not those really old albums on black paper, or the old-school albums with the sticky pages, or an album with yellowing paper or a strong smell) you probably don't need to do anything else as far as physical preservation is concerned. If they're not in archivally stable albums, I'd ask the folks at /r/archivists for technical advice of what to do next. (They're nice over there, I promise.)
If your grandfather is still alive, ask him if he's willing to help you label the photos and tell you stories about the circumstances that led to the photo being taken or what's going on in it or who's in it.
I agree with /u/SnarkMasterRay that thinking long term is smart. I also agree that planning to both scan them and donate them is an awesome idea. Donating them to an institution is the best way to keep valuable historic photos or documents stable for decades upon decades because they will have photo conservators on staff and rooms that are kept indefinitely at an ideal temperature and humidity for preserving photos--much better than a garage, attic, or basement that usually fluctuate in temperature with the seasons or is vulnerable to a basement flood or some other catastrophe. They are also much more likely to be concerned with maintaining digital/online versions of their holdings for the long term too--longer than a sharing site.
Some archives that are large enough and have staff enough when requested will image your donations themselves and give you a nice, high-quality digital version in exchange for your donation.
Many archives and libraries are increasing their digital presence and would like to get their holdings online too, and you could request as part of your donation agreement that they get at least a portion of them online in X number of years. (Limited staff and money is always an issue for libraries/archives, but if they already have a robust digitization program in place, I don't think that would be an unreasonable request.) You can also request that the photos won't be published (like as an illustration in a book) without your permission so you can maintain some control over the images.
I'd start out by contacting your local university (assuming that they have a special collections or archives) and ask them about their digitization program and what they'd do with your grandfather's photos if you were to donate them. Universities or WWII/military museums from your grandfather's home state would be another good group to contact.
Depending on the number of photos and the quality of them, it might be feasible to contact one of the big national museums that have a collection focus on WWII.