For marking the heights I decided to use Mini Polaroid photos and push pins:
Designed a Polaroid printable in Photoshop that I could print out on a 4x6 photo at my local CVS or Walmart. You can download the template I used here: Polaroid PSD
File is PSD format you'll need
to edit it.
Printed the 4x6, cut out each child's mini Polaroid and used cute push pins to mark the spot on the board.
I plan to continue this at the beginning of each school year with an updated photo. The Polaroid method seemed best because I knew it was something simple I could have printed each year and also if a photo gets old or damaged it is easy to replace. I also liked being able to leave the photos up to watch how the kids grow and change every year.
*Push pins were simple silver thumb tacks which I covered in glue and dipped in flower shaped glitter.