UK Coins for the year - the Royal Mint sell a presentation pack with all the coins for 2011, that's suitable to keep into adulthood (and doesn't take up much room!).
train set would be good, or also a proper wooden fort, castle, zoo or garage - these would last for ever and would be handed down through the family. Or actually I am sure I saw somewhere a lovely wooden noah's ark where you could collect all the dfferent animals as you along, that would be a lovely thing to have. If you want it to gather value, then buy some of the limited lego sets.
If you are looking for something that will hold a lot of memories a photobook is a good idea. There's a great website called 'fotoinsight' where you download the software and design an actual book of your own photos. I have done it for myself and one for my niece to commerate her first years in photos, going from her very first one to the latest one, Its a lovely thought and will keep for years as its not a photo album, its an actual book! :)
I don't think any child of one year old is likely to cherish anything for very long. It will get damaged or broken. Depends on how much he wants to spend. If you all club together, maybe you could buy him a £100 premium bond, which is the minimum amount you can now buy. If you don't tell your son about it at least the money wwill be there safely for him when he reaches the age when he can cash it in if he wants to, although inflation may have devalued it somewhat by then.