Lots of comments on this subject and I agree with most.  Just a few "clarifications."  First, the restriction of an air filter is there all time the throttle is wide open, including at high altitude.  True, a high altitude the number of hp lost is less, but the percent loss is about the same.  Another comment said that there isn't a noticeable drop in manifold pressure, so it doesn't make any difference.  True, the reduction in manifold pressure isn't much, but it is there.  So while every little bit counts, it is up to the owner to decide whether the reduced pressure drop in the K&N is worth the potential increased wear.

Also, it isn't exactly true that IFR aircraft must not have "the slightest power hesitation...."  In fact, air filters can and do plug with ice and water.  The FAA concluded that since it is unavoidable, they require an alternate air source, either automatic or manually operated.

Okay, you can soak a paper filter with water and it will block air flow, while if you do the same thing with a K&N it will still flow.  That's partly because the holes in the filter are larger (that would be the same holes that let the dust through) and partly because the oil repels water.  Is that a big enough advantage to use the K&N?  Don't know.  A filter manufacturer told me that the main difference between automotive and aircraft filters is that aircraft filters are required to have enough strength to avoid being sucked into the engine if they get plugged.  That's why there is a metal screen on the downstream side.

For what it's worth,

Gary Casey

If you occasionally take off when you can see dust in the air, you might be well advised to use a paper filter.