I know it's 2010, and it's probably safe to say that most writers prefer to use a computer when working on their WIPs. Well, that's what I would expect since we are living in the age of computers. I've given this a try, but I have to admit that it's not for me.
There is something about writing those words just above those blue lines and seeing them fill up a page that excites me. There's something about choosing my pens or pencils and seeing the ink smudges on my fingers when I'm done. I've always preferred to use plain old paper and pencil/pen. Another plus to being old fashioned is not having to worry about my computer crashing and losing all of my work.
Now, I know that it's not practical to complete your entire WIP on college ruled notebook paper in blue ink and mail it to agents and publishers. Of course, it will have to be typed eventually. This is just a minor step compared to writing everything.
Writing by hand also allows me to follow the story and stay in the moment. ("Be in the moment" is a concept I'm quite familiar with thanks to my Gestalt class.) When I use my computer to write, I find myself constantly going back to fix things or holding down the delete key. It's so easy to just scan back up to the top of the screen and read over what I've done, decide it's crap, and fix it. Having a stack of notebook paper makes me feel lazy and not want to flip through the pages. Once I get to a spot that feels right, then I can read over what I've got and make changes.
Now, this is just my preference. I know of a lot of people who use their computers to write everything, and I understand the ease they may find in it. For me, though, there's something exciting and satisfying about lined notebook paper and ink smudges on my hands.
*Thanks to diplomaguide.com for the picture.