I only agree with using papers during rehearsal, not during Sunday Worship (unless its a hymn...then i might consider.) My rule of thumb is, if they don't the words, then I'm not even going to sing it on Sunday until they do.
Sunday is the time for us to minister to the hears and souls of the congregation, not focus on what words come next, or what notes come next. That's our time to proclaim the goodness of Jesus, or preach the Gospel, or encourage the congregation, or whatever. I also feel that it keeps them into the songs...when you begin to let the spirit move, and they see your excitement, it gets them excited...its less likely to be that way, if one is too fixed on the words of the song. Let rehearsal be for that...and come on Sunday ready to minister the word effectively.