A company downstairs from my company, Presto, has an even easier way to share those digital pictures with grandma. Buy grandma a Presto/HP printer and she'll get a Presto email address. Send your pics to her and they'll print out on her HP printer automagically.
I like to download my pics to my computer still. I usually use Picasa and then upload the pics to Flickr. My friend Terry often has good tips on digital photography in his blog.
Note: This post is sponsored by HP.