At my place of work, we have the two options placed immediately next to each other. Personally, I'm all about the paper towels - three of them at once usually provides the correct amount of paper volume for general hand wetness. In fact, I don't see why anyone would choose hand dryer unless they were a) genuinely concerned about the environment (but what about all that electricity?) or b) trying to kill time with rigurous hand drying before heading back to the desk.
What about you? What factors affect your decision?
In other news, I am bored as hell.