I love both but before you go to the work of making a paper bag album consider the recipient and how long you want it to last.  I love the look of paper bag albums and have made several for gifts.  The recipient has to handle the paper bag album carefully as they just aren't that sturdy.  If you want to make a cute, little album for someone as a thankyou or small gift the paper bag album can be delightful.  If you are putting much time and expense into the gift an alternative you may want to consider is using a board book. 

A great place to find board books is at garage sales, thrift stores and on ebay.  I just looked at several completed ebay auctions and you can frequently buy them for less than a dollar a piece.  I typed in board book and bought used children's board books.  (right now I'm buying them for a grandchild and when she tires of them, then I will alter them and make them into a tiny scrapbooks!) 

The board books make fun, quick little scrapbooks.  I just made one for another new mother who loved getting one personalized and ready for her pics.  A con to the board books is that you don't have all the pockets for the tags and pullouts that the paper bag albums have.  I even like the board books that are shaped differently.  I found one shaped like a flower that was fun to make for a gardening friend.  It was easy to trace the shape onto scrapbook paper.  I use any of my usual adhesives to secure the paper to the pages.  I usually pick up a glue stick but have also used tape runners etc.  Currently I am making them for personalized Christmas gifts for my female friends and family. They make quick cute projects and is another good way to use up all of your smaller scraps of paper, stickers and other embellishments.