Because the Prius engine is low displacement (1.5L) and rev limited, its air flow demands are comparatively low and unless your paper filter is old and clogged, you really won't see any benefits by replacing with a K&N.
That said, I will admit to putting one in my Prius this week.. My plan is to use the K&N in the late fall, winter and early spring when the dust and particulate count is low, but the amount of moisture in the air might be high.. Looking at the inside of the air intake box, I can see "tracks" that indicate that water has gotten into the intake at some point. Moisture can temporarily "clog" many paper filters due to surface tension, and I want to maximize flow in this situation. The K&N is ideal for my planned use as the oil repels water and I'm also taking advantage of the time in the year when particulate count is low and I don't have to worry as much about dirt potentially getting past the filter.
The comparatively low airflow requirements of the Prius has also got me thinking about whether one of those "electric superchargers" might actually have some benefit on this engine.. Certainly they would do absolutely nothing for a conventional car with >2L engine at 6000 RPM, but the Prius only needs something in the ballpark of 240 CFM airflow at 4500 RPM, which is quite doable with a big electric fan, and at lower RPMs, a small amount of boost is even likely..