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Air flow, in my experience, can be a somewhat touchy subject. I higher flowing, less restrictive air filter *can* improve engine efficiency, power, and mileage, but it is on an application-by-application basis. My last car was very similar to my current car, but it had a smaller turbo. A local tuner performed extensive tests on Car A with a K&N panel filter and saw no improvements in any area over the stock air filter. When that tuner (and others) did the same test on Car B (with a larger turbo) and the car's power increased by 5-7 whp, the mpgs went up by a small (but noticeable) amount, and the AFR leaned out by about .5 (where the fuel economy came from, IIRC).
But again, this is an application-by-application, so your mileage may vary.
Now, in terms of restricting air flow, if you have an air flow sensor, your car is just going to compensate (but will be down on power). Even if you don't, you have a higher likelihood of "running rich," which can actually hurt your fuel economy and possibly damage your engine (rich knock).
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