From what I heard recently in Switzerland, burning newspaper in household fires leads to quite toxic smoke from the ink etc., so it has been discouraged even to start a fire with newspaper. I can't judge if this is a bit extreme, but burning bigger amounts of paper logs, made by soaking the paper first in water and drying them, seems really not ideal, thinking that to make paper of wood is already a process that is not exactly famous for environmentally friendliness... Unless someone can present evidence of the opposite, I would say, real recycling or burning in industrial ways with up to date filtration is better.
