My dad always used newspaper indoors to light the fire (rolled them then turned them into ringed dooughnuts). It works well, he ususally puts wood [then coal, in deepest winter] straight on top, leaves the vent open and lets it roar for about 10 minutes and bingo, one hot fire he can shut down to burn slowly and efficiently through the evening. For this reason when I was young I automatically tried newspaper outside for the camp fires, but I soon realised that it was far more important to have enough real tinder and a good transition from small to big. Oh, and tipi fires suck with newspaper, that's the other thing I found out, as the paper disappears leaving a massive gap.
Paper is best indoors when you've got a strong and constant airflow. It can put out a fire outdoors by stopping full airflow around the kindling.