I recently bid on a software project where I asserted that the best way to design user interfaces was using paper. I think that the committee (yes, I was going to work for a committe, but it was for a good cause!) thought I was a hack, or worse, an amatuer. And yet, paper prototyping is something I've always done, always liked to do. Particularly valuable is its approachability, but also that it sends the user-representative the exact right signal: this is a rough design, it can change an incredible amount, lets have fun! It also helps both parties focus in on what is important and what is not!
Now I find that Neilson (a Sun senior architect and autho r of the psuedo-famous "Anti-mac" paper is selling a DVD describing how to do paper UI prototypes.
Interestingly, I never used colored, seperate pieces of paper for tabbed prototypes but that's a great idea! Thanks Mr. Nielson!