Roto Authority gives some tips for starting your own keeper league. This was something we did a few years ago, and it's proven to be a lot of fun. Tim suggests using Yahoo! to host the league and do the draft in person, and while I wouldn't disagree too heartily, there are alternatives...
We host our league at two places. Stats and rosters are housed at CBS Sportsline (no, it's not free, but sometimes you get what you pay for) and our rules and draft room are hosted at a website created with Google Apps (our league members are spread out across the country, so an in-person draft is logistically impossible). Yes, thats right, we have a draft room of our own, which we created with Google Apps as well.
Links:
Roto Authority Fantasy Baseball: Mailbag: Starting A Keeper League
Mason-Dixon League
Hacking Fantasy Baseball Drafts