The student's Google Docs / Drive account becomes the repository of all their work.
This doesn't mean that all work must be done in Docs, typically how much work the student does here is dictated by two factors, age and access to hardware.
When students receive their account, they create a Collection called MS if they're in Middle school or HS in high school. This is shared with a holder account called 'Portfolio' so anything inside can easily be viewed.
Within this Collection, they create Collections for each subject that is then shared with the teacher of that subject. They rename each one with Subject and Name.
For example: 'Science - Smith, John'
They then 'take' a copy of a Portfolio Cover Sheet.
It's also important to note what can you do and expect that you can't with the analog equivalent. For example, our students are expected to read and document 25 books per year.
This booklist before and after: http://youtu.be/T8RsxdXCMvU
Now that students have organized their Collections and spreadsheet for the teachers. The next step is to have students create a showcase portfolio. For this we use Google Sites. The idea of the public face of the students work, and would be geared toward a college or job interview. The 21st century equivalent of a business card. In fact, we buy our students their own domain name and have it forward to their Student Showcase. Students build up their showcase portfolios throughout their academic career.
The Showcase template: www.tinyurl.com/rsu19pt
The Assessment Collector: http://thetechcurve.blogspot.com/2012/04/managing-google-docs-in-classroom.html
Finally, using services like Data Liberation students are able to take their digital work from one account, and upload it to another.