I've been using K&N filters on my 240Z's for years and just recently put one on my 'stang. I can't vouche for any HP increases, or other hype you've read about but they certainly don't hurt either. The strongest selling point to me is that you're buying one filter and that will be it. You'll never have to replace it again. Clean it once in awhile sure...but that will be it.
I think they are worth it. Unless you're SWMBO takes the car to the dealer for work and they give her a line of feces about it not meeting warranty specs and they charge her $37 to put in a $10 filter. Damn that pissed me off. I was in Italy, so I didn't know about it until it was too late.
Air filters won't increase HP unless you're replacing one that is stopped up. Other revelations;
Zmax with linkite is a rip-off
Traction bars won't stop tire spin
Fiberglass won't "fix" rust
Ceramic header coating is better than paint, but only lasts 2-3 years
Bowflex won't give you a "perfect" body by using it for 10 minutes, 3 days a week.
No Santa Claus..
I can't vouch for HP increase either, but they do keep all the crud that's in the air out of your engine better than a standard paper filter. (Sort of the technical definition of an air filter anyway.) You'll be stunned the first time you clean one and see all the 'stuff' coming out of it. Won't use anything else!
"Air filters won't increase HP unless you're replacing one that is stopped up"
To hear my youngest Brother-In-Law's friends (19-ish, import crowd wanna-be's) talk, a new muffler w/salad shooter end pipe, K&N filter and some R-Type badges and they've just picked up "Atleast 50 hp!" Now we know that most of that comes from the R-type badges! /forums/images/icons/smile.gif
I used a cartridge element on my '87 Nissan Hardbody with little increase in HP. I did put a 360 cold air intake on my '95 Jimmy and did notice a little better throttle response.
As for the dirt, there are many arguments either way. Some say that - because the filter lets more air in - more dirt can get in the intake and mess up the engine. These same people swear by paper filters. Others argue that the particles are trapped by the oil in the filter element (This is sprayed on.) and catches any of these dangerous particles.
Here are some arguments in the google newsgroups. Since I am more familiar with the chevy trucks, I used that as the second example:
Oh, and one of my buddies who restores old Pontiac TransAm cars works at a place which does dyno testing software. He's tested his '96 Mustang and his '78 Firebird both with and without the K&N and swears he sees a numeric difference. I'll have to get in touch with him to see just what the numbers were.