Stories of destroyed engines are exaggerated, anecdotal, and subject to interpretation (oh wait, its on the Internet! It must be true! Bonjour!). I have yet to read one where someone was able to definitively show that it was the K&N filter that caused it. Keep in mind that the dirt measurements are measured in parts per million. Under normal highway use and oiled and cleaned properly a K&N is no more going to destroy your engine than towing a trailer will. The body of your truck will disintegrate before you kill the engine with a K&N. I had a '95 'Burb that had a K&N on it when I bough it. My dad has that truck now, and with 190k on it the engine is still running like a kitten.
However, the gains from a K&N on a modern computer controlled engine are marginal at best. If you get your PCM tuned, and if you put on other mods like a cat back exhaust, you might see enough gains to pay you back in a couple of years. In other words, a K&N on a modern engine is a waste of money. They look cool though!
Just go with the paper filter as that's what the manufacturer tuned the computer to use. Modern paper filters have far better air flow than they did 20 years ago.