Yes and no. The biggest writing task I do is film scripts (which run about 20-25,000 words). I'm used to editing as I go and I have the whole story plus a lot of the language in my head while I'm writing (or more often, typing - the composition part usually takes place away from the keyboard).
But once I'm done with a draft, the next day I go get it printed and then I go through it with a pencil, crossing things out and scribbling notes on it. Not being able to edit the paper version makes some errors suddenly visible (like misplaced subject errors that a spelling/grammar checker can't easily catch) and more importantly it gives me a much better sense of the narrative pacing and suchlike.
I do very much appreciate the capabilities of a good word processor. The idea of writing in linear fashion using a typewriter isn't appealing at all. Incidentally I'd like to mention I use Fade In, which is a one-man project by Kent Tessman who answers all his own support queries. It's well worth the $50 he asks and vastly more pleasant to use than Final Draft.