Heh, my in-laws visited over the summer (all of my in-laws, we had 10 people in the house for a week!) and kept asking me about paper towels, paper plates, napkins. My SIL uses paper plates almost exclusively, and I hide mine so they only get used when *really needed.*
I keep a roll of "shop towels" (heavy duty paper towels) in a cupboard for particularly nasty messes (grease, pets) that I don't want to stain my fabric; other than that, we're paper-free all the way. Dish towels ($1.99 for a 3 pack @ IKEA; I bought 3 packs, they've lasted for going on 3 years now and are very absorbent) and cloth napkins all the way. I'd estimate my kitchen fabric equals less than half a load of laundry, and it's super-easy to just throw it in with regular laundry.
I took my "paperless" one step further and scanned my paper recipes into EverNote, which I access from my kitchen laptop (set in a corner right next to the cooking area). I use Microsoft's OneNote software to copy/paste recipes and my inevitable changes and notes. :)
We used to have a full garbage can every week... now, it's more like half full, if that, for the weekly pickup.