I love wireframing by hand especially when working collaboratively with the client. When you work on a computer only one person can wireframe at a time, but with pen and paper we can all wireframe together.
The problem is that pen and paper wireframing takes a lot of redrawing. You find yourself constantly drawing and redrawing screen elements, which proves time consuming. This is not a problem on a computer where you can copy and paste.
Apparently I am not alone in my desire to combine the best of computer based wireframing and good old pen and paper. Nat from Lanyrd feels the same and has solved the problem in a simple, yet elegant way.