It would be great to be able to use the paper to create some sort of journal that logs your fun & achievements. Perhaps automagically, perhaps by some sort of "journalize this" selector.
And photo albums. All these pictures I'm taking and no album to flip through or display.
Or a travelogue which could work in conjunction with the map. It could let you record info and hold teleport scripts that you've written (perhaps limited to one per street).
And, of course, the ability to create books or pamphlets for others. There's tons of potential here. In-game newspapers, such as the UrZine, would no longer be limited to 1000 characters.