I just joined and this is my first post, so please be kind! I've been over at Titantalk for a while and have posted quite a bit there about the plusses and minuses of the K&N and other oiled cotton gauze filters vs. paper.
I don't claim to be an expert, but we have been in the automotive, industrial, diesel, performance engine rebuilding and machine shop business since '47 when my dad started the company. We do both production engine rebuilding (about 1500 per year) and custom shop work for speed shops and racing engine builders.
My general conclusion: Although paper filters filter "better" there is a limit to how much "better" really matters. You reach a point in which better filtering does not equate to longer engine life. Frequent oil changes (3,000 miles or less if really dusty, dirty conditions) with really good oil filters and avoiding overheating of the engine are the two most important factors in engine life, and we see no difference whatsoever in engine life when properly oiled cotton gauze filters are used in comparison to paper.
Now, having said that, let me say that I do a good bit of off road stuff with a modded CJ5 Jeep. It has a K&N sitting on top of the carb. In dirt, dust, mud, it can withstand a lot of abuse and even when caked with all that stuff still flows better than the engine can handle, even with full length headers and very low restriction exhaust. That set up has been doing its thing for almost 15 years on the original filter. Easy to clean and maintain.
I run drop in K&N's in all my vehicles, have for many years and have had no problems. One was on the '97 Ford Expedition I sold at 107,000 miles to purchase this Armada. It went with the truck.
And, no, we don't sell K&N or any other brand air filters!
Now, about performance gains. To be absolutely straight, I seriously doubt that a drop-in K&N or other similar filter will make any significant difference in hp or torque with our engines. I think the intake on our trucks is already pretty much optimized (unlike some other trucks), for the volume of air our engines can pull in stock form. But if you mod the exhaust, you probably will get some added benefit from the two together that you would not get from either alone, because it does no good to increase the ability to flow more air, if you can't pull it out on the exhaust side.
Example: I also have a K&N AirCharger for this truck. I have an accelerometer and believe in using such equipment to objectively measure changes. While the AirCharger is a lot louder than the standard air box, I can't see any really measurable increase in performance - maybe a couple hp and a couple pounds of torque. If I unplug the exhaust (uncertain whether I will) chances are that I will see more gain, but at the expense of a LOT of noise.
Summary: Paper and oiled cotton - no real performance difference on our engines in stock form. But if you take the truck off road a lot, drive in dust, dirt, mud, the K&N makes sense. Or if you, like me, prefer to do your own maintenance and intend to keep the truck a long time, then you will save money in the long run with the K&N. If you open up the exhaust then the K&N will flow better and it will show then, but probably not without that.
Thanks for letting me drone on. I'll try to be more concise in my future posts.
Don't you just love these trucks? Intoxicating.