I keep the psd until the layout goes for printing, mostly in case I notice an error or need to make a change when I'm organizing layouts into the photobook. After the book is printed, I delete the layered copy and save the flattened one.
I save the flattened versions forever. I want them backed up in case something ever happens to my printed copies, and I also want the ability to reprint. For example, when my oldest left for college last year he wanted me to make him 1 photobook to take with him, something that spanned his first 18 years and included all the most important moments for our family. If I'd had to start fresh and scrap 100+ pages for the book, I'd never have finished!
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