I've used paper negs in a pinhole, and in a home-build project.
The results are pretty good, and as you can load and dev under safelight, are much easier to handle than film - particulary if you're tapping the neg to the back of a cerial carton. I'd suguest giving it a go, and move to film when you feel you need to.
Grade 1 paper can produce better results than VC, as it controls the contrast better, without depending on the colour of the thing being shot.
In my home-build I estimated the speed as being about 10, but with pinhole thats pretty irrelivant - I just set up the darkroom, then went outside, took a shot, dev'ed it, and then took the next shot based upon that experience.