As a matter of fact, you guys are on the right track.
I work for a filter media company that supplies most filter companies (Honeywell/Fram, Baldwin, Donaldson, etc.) with the paper they use to make their filters.
Paper (Cellulose, or wood fibers, and glass fibers) is VASTLY more efficient at removing smaller particles.
Oiled cotton gauze (K & N uses 4 layers, I think) lets particle sizes of more than 40-60 microns to pass. That is to say, they can filter smaller particles, just that is the
average particle size they capture down to. Heavy duty air filters, like the ones found on semi's and large diesel trucks, filter down as low as 10-15 microns. An average daily driver car, has a filter that filters down to 30 microns or so. The smaller the particle, the less damage it will cause in critical wear areas (bearings, cylinder walls, valve stems, pumps.) This is the reason that diesel trucks run forever. They make sure that there is next to nothing in the oil that can damage the engine. That is also the reason those diesel engine filters are so large. The pores are so small that the flow rate is diminished and you have to increase the surface area of the filter to compensate.
I am a research and development technician that does nothing but test air and lube filters and media for a living. I don't want to sound like a know-it-all, I just want you guys to make an informed decision when choosing something that is going to affect the longevity of your vehicle. I have no brand preference. So I gain no profit from you buying any type of filter. Do your research, look up "beta ratios" and if you search for a particular filters beta ratios, that will tell you what percentage of a specified particle size (5, 7, 10, 15, 20, 30 and 50 are the most common micron sizes used) is being filtered out by that type of media.
I'll be back on at about 6:30am EST. Post any questions here and I'll try to answer them before work. If you couldn't tell already, I don't sleep much
.