I went from a KKM to a drop-in K&N, and I my mileage is about the same (22-24 MPG combined). I've never used the paper filter.

1999 Red / Tan SVT #1969 of 2760 Built 4/21/99 K&N, DMD, FMS Wires, ES Insert / Bushings, PF End Links 17" FSVT 5-Spokes Factory Spoiler 35% Tint All Around