RtM not only works with iCal, it’ll also give you reminders of events by email, ICQ, AIM, Yahoo, Jabber, and (although I have yet to test it) SMS, as long as you give it the information.
As far as pen and paper vs. computer goes, here’s my system:
I have a moleskine notebook pimped out as such, and then every week or so I process everything new, putting it into RtM as a to-do or event. I’m considering making an add-on to the moleskine PDA, basically in the form of a few basic Hipster PDA’s, so that I can have portable to-do lists and only have to carry the processed ones applicable to my context (ie if I’m going to work, I’ll take the moleskine and throw the @work cards in; if I’m going to the shops, @shops; at home, keep the @home one on me) in the back pocket of the moleskine.
Basically, I need to get back on the Getting Things Done bandwagon, which I highly recommend.