I have done both - started doing GTD with paper (Time/Design) 16 years ago, then Palm, etc. etc. Am now working a "dual system" - I have a paper planner that includes:
- my "master calendar" (a composite of my day job calendar, personal items, and calendar that my husband & I share for our business). I enter anything I know I'll want to keep track of on this master calendar. I find that entering these things by hand in one place makes me more conscious to what's going on.
- Project & Action lists
- Blank paper for taking notes
- Reference material
My husband and I share a Google calendar that I can also access on my iPhone. I have errands lists in the Notes app on my iPhone.
I've just found over the years what works for me in paper and what doesn't. When I tried to make myself ALL one or the other, it never worked. But I am much more conscious to my lists and more careful about how I word actions and projects when I use paper. I cross-reference projects and actions with notes, weekly review, etc. and found that in my electronic days (daze?!) tags, folders, etc. just ended up making my eyes glaze over!
But I agree with others who counsel you to go with what you're innately attracted to, and don't feel that your system has to be either paper or electronic. Just try to be objective as you're building it, and notice what is and isn't working (weekly review time is great for this)... There's a little nagging voice that will let you know if you listen to it!