i've seen a few different bitcoin hardware wallets they look sweet!
One of the main concerns when I started looking into it is that a hardware wallet for general use really needs to have a display and a "confirm transaction" key otherwise it's vulnerable to certain kinds of attack.
i saw one that worked with an android phone, the card was like holding private keys, communicated with the phone to prompt the user & sign the TX, seem pretty secure way of spending coin on your phone, I wouldn't get rid of the paper wallet just yet, but it sure can beef up security for the spending wallet.