My thoughts on the Paper Mario World has always left me puzzled. It is strange how Mario can be 3-D in one game, and be flat and have "paper powers" in another. Could there be two Marios? Two Bowsers? Two Peaches? Two Toadsworths, etc.? Maybe there is a completely different dimension (like many people have said) that is almost like a copy of the 3-D Mario world, only in paper. There is Mario, and then there is Paper Mario.
It is either that or the Paper Mario games are simply telling you a story of one of Mario's adventures. Mario did the adventure in 3-D, but the story is obviously told in a book, hence the paper. The games do seem very story like, and sometimes as if you're participating in a book. Then again...If Mario actually did the adventure in 3-D, then wouldn't that mean he would have paper powers out of the Paper Mario world?...nevermind. My theories are strange, I know. I'm not that good at explaining things, so if you don't understand you are most likely not alone.
I've noticed, though, that there is a lot more creativity in the Paper Mario world. It seems like that 3-D Mario worlds are a little touchy when it comes to making new characters. Sure, they made the Piantas and Nokis, but by the end of the game they were getting a little old. Paper Mario keeps it going with new species in each chapter. A dragon, then punis and a cloud lady, next a champion WWE style wrestling hawk, ragdoll people and a freak in a sheet, Flavio, Shadow Sirens, X-Nauts, Cortez, Ishnail, I could go on and on but I'm sure you're already bored of hearing me jabber about this. Okay, I'm done.