When you send bitcoins from an address it will send the desired bitcoins to the address you told it to, and any left over bitcoins will be sent to a completely different address. I believe armory is deterministic in that you don't need to keep track of all the newly created addresses. But if it doesn't, then a paper wallet won't be sufficient unless you print a new one each time you make a transaction.
Ehm, I believe you have been misinformed that doesn't match any of my bitcoin knowledge. Where did you learn this from?
No, it's correct.
You can check it e.g. by installing coin control in the qt-client.
Example:
You have 5 BTC transferred to your paper wallet, when you send 2 BTC to somewhere you will actually send all 5 and get 3 back to a different adress.
I haven't used Armory yet, but I think they have this problem solved by this deterministic approach (need to inform myself about this,too).