The question is: what's a PaperPhone? :)
According to researchers, it is best described as a flexible iPhone – it does everything a smartphone does, like store books, play music or make phone calls. But its display consists of a 9.5 cm diagonal thin film flexible E Ink display. The flexible form of the display makes it much more portable that any current mobile computer: it will shape with your pocket.
Here's a video:
It looks pretty interesting but I don't see the use for it for the average consumer. But, let's wait for further developments.