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I once read a pretty comprehensive test on the K&N vs. Paper element. (don't ask me to find the link, it's been too long) The conclusion, with this paticular application which I believe was a late 80's 5.0 mustang, was that a high quality paper element flowed exactly the same as the K&N until the K&N was washed and treated with oil, then the paper filter out flowed the K&N. It's almost impossible not to over oil when you clean them. I put over 100,000 miles on my orginal paper filter, then changed to K&N and noticed no significant change in mpg, then put another 100,000 miles on the K&N before washing it (it was reallllly dirty, you might even say clogged), noticed no change in mpg after cleaning it. We use so little air in our light footed driving that you could block most of the filter and never know it was blocked. If you got the money and the K&N makes you feel good, then go for it. I can't really justify it as a ROI mod though.
Myself, I like to enjoy driving the car. So when a part rusts out or fails I upgrade, rather than do a direct replacement. My exhaust rusted out and for $100 more than a direct replacement I got a 2.25" mandrel bent pipe with nice open muffler and resonator. It really livened up the car throught the power band, much more enjoyable to drive. The exhaust manifold cracked, so I bought a used header, this really woke things up when driving in a spirited fashion and also helped torque quite a bit. Car remains economical, increases my driving pleasure and parts that fail get replaced with better parts...win,win,win!
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