TNB, I purchased a flight and duty time program in early 2003, DFT (Duty and Flight Times) v8.0. The software proved to be an excellent product for flight and duty time / log book management.
I presented electronic print outs from the log book (displayed in a lose leaf folder) to CASA in early 2004 to obtain my ATPL license. This posed no problem with CASA (at that time) and the log book was actually commented on by the CASA FOI as a very effective tool. Since then though I have heard that the electronic print out is required to be bound. Not sure of the actual requirements, either way no big deal really.
In regards to the airlines giving it the big thumbs down and I am not entirely convinced this is the case. I completed interviews / testing with a leading regional airline in Auz last year, and again was given favorable comments in regards to the electronic log bock in the actual interview. At a later date I was offered employment with this airline.
It probably is an excellent idea though to run both systems as it is a comforting piece of mind simply knowing that there is an electronic record.