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We'll probably use Costco, you can't beat the 50 for 15 bucks and you can have them in an hour.
I'm sure its not the most cost effective option, but I love tinyprints.com. The personalized photo ones come out to around $1/card range when you order 50, so it doesn't even come close to the Costco deal, but they do an amazing job. We had Wedding Paper Divas wedding announcements done and couldn't have been happier with them.
You could probably do them for free through VistaPrint if you're fine with them being postcards. They always seem to be running those 100 free post card deals.
We did ours on www.postcards.com. We designed them ahead of time, and put in all our addresses, so when Addie was born all we had to do was drop in a photo and press "send." It was super easy and cheap; I think we paid like $0.43/postcard, and that includes postage.
I just had another thought...you could purchase a design off Etsy and print it yourself at home, somewhere like Kinkos, and Costco also gives you that option.
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Does anyone know of a good deal on birth announcements? I've been looking around a little, but figured someone might be able to recomend something. Thanks!