While I will admit that I have not always been as ambitious as Paul or Chris about pushing so much student content into the digital realm with the regularity, I certainly have students working in digital spaces and producing content. So, I will add a couple of my thoughts to the mix.
First, I am pretty up front with students about not being able to grade everything, while stressing the value of doing all the work. I am always amazed at how compliant they can be about this. As long as there is a means for them to make an appeal if they are dissatisfied with an ultimate grade, there is generally not a lot of trouble with not grading everything. Most students can be remarkably understanding about this.
Then I almost always take a cue from the portfolio paradigm. For example, students have to complete all of the work that I make a requirement. However, I give them the choice of selecting their best work from the collection and I will grade that. I will give them some kind of credit for doing it all, which I usually negotiate with them. Then I will more rigorously grade what they want me to grade. This alone can cut the grading issue down considerably.
I should add that grading is not usually the struggle, however. It is providing timely and regular feedback, especially in the area of writing. I have come to recognize that often students need earlier and more regular feedback and guidance and then a gradual release. Thus, with this understanding, very often the item that student will present to be graded is a fairly easy affair. targeted and early feedback is one huge advantagethat can be gleaned by having students work in digital spaces. Simply commenting on their work, provided that is an available feature, can be a boon on this front.
Another technique I definitely use when I am in the thick of a lot of digital work is constructing a Class Monitoring Portal (CMP). This is a term that I got from Vicki Davis (Flat Classroom Project), although I had been unknowingly building these things for a couple of years without labeling it. I actually adapted from a technique I saw Steve Hargadon do in the Ning heyday. Essentially, I use something like Pageflakes, Netvibes, or even iGoogle and make a dashboard of RSS feeds for each student in my class. Routing all of the various RSS feeds from the multiple sites being used into a single repository allows me to instantly monitor student activity and verify that they are actually doing what they are supposed to be doing. In some ways, it is very nearly a digital version of Paul's charts he shared in the video. Here is a very simplified version of a CMP with a bunch of blogs from some classes of mine last year.
I generally figure that I need to find ways to make the tools serve my needs and I try to leverage the power of RSS as often as I can. Plus, then I can share some of these techniques with the students too and they can figure out more potential uses as well.
Well, that is a couple of things to think about in relation to this dilemma.