Elgg is the open source(free) social networking system you can host. It is ideal for eportfolios and has many advantages over other such systems. Number 1 it's free and fully customizable. You can choose themes, design themes, and give it your own branding. It is also extremely easy to use. Have students start by filling out their profile. Then they can add files, pictures, videos, audio, or whatever. They can also keep a personal blog, add friends, start and join communities, and even keep and view their own RSS feeds. It's pretty much MySpace for education.
A lot of work is being done presently to have full integration with Moodle so that students can send their Moodle activities over to their portfolio with one click. Together Elgg and the more traditional LMS (Learning Management System) will provide students with structured and guided activities as well as the freedom to experiment and create in their own virtual space. Now we will no longer have to choose betwenn traditional evaluation and assessment and the more holistic kind. We can have both working together, supplementing each other, and in harmony.