I haven't seen this yet but it certainly sounds interesting: Scientists at Hewlett-Packard have developed a technique to detect creases in photographs using standard, unmodified flatbed scanners. Once correctly scanned into a computer, software can determine where the photograph's defect is, and artificially correct it to remove any trace of a crease or fold. The result is a spotless JPEG scan from a creased photo, with absolutely no modified hardware and no technical know-how required on the part of the user.
It sounds too good to be true but the article at http://crave.cnet.co.uk/gadgets/0,39029552,49303316,00.htm is very convincing. Want to try this on some old, damaged family photographs?