This has been a bit of tug-o-war for me for a while. Where I've mostly settled is that I use TiddlyWiki as my main notetaker / knowledge base and using a paper notebook as a sort of sidecar (taking notes by hand where it is easier or more appropriate and then transcribing them into the wiki).

My wiki entries range from little "cards" of a few short sentences to longer entries written while analyzing or designing something.