I personally use both formats.
Here in Canada (and I assume in most jurisdictions) the paper logbook is still the "official" way of logging flight time. You can go electronic if the program is certified and you ensure there are ways of protecting the data from corruption and/or loss and that the data is accurate. I'm in the process of doing this with my own, homebuilt logbook in MS Access.
As for keeping on par - I've gone so far as to entering my time into the electronic log and then copying that entry over into my actual logbook. That way I am assured that both are correct with one another.
From what I've seen with my company and others similar, there seems to be a growing trend towards the electronic format with the younger pilots while the older guys and gals still use paper. As a percentage I'd say here its probably around a 30%/70% split, with the 30% being electronic use - that figure is rapidly climbing though.
I would think that in more modern jurisdictions, like the FAA or JAA, the use of the electronic log book would be much higher because they embrace technology, unlike Transport Canada where if we could all be back on library cards and rotary phones that would be just fine with them.
As for the job search - yeah, they do become a pain if you have to sort through thousands of hours - but then, remember that the average commercial pilot will have flown maybe one or two types during a set time period, so its not really that hard - certainly though, the electronic format makes that 100x easier to do.
Also, most companies dont care about exact numbers - the difference between 10,000 and 9,525.6 really does not matter a whole hell of a lot.