I did a quick google search after reading your post as I was intrigued.  One of the things that caught my eye was making a cloth or canvas book.  You can either sew in the patches or use velcro to move them around.  I liked the book idea because then you can do the patch on one side and then a picture or two on the opposing page.  There are some cool options for transferring pictures to canvas as well. 

Good Luck!