I find that the shredded paper doesn't work as well as aspen for bedding. It tends to stink more, has to be cleaned more often, and gets quite nasty when wet.
I do use some shreddings for when we're short on aspen for a quick fix until we get to the store. But typically, if I'm not using aspen I'm using paper towels. Much easier, more absorbent, and less of a mess when cleaning out cages.
I also use the paper in the mouse colonies as nesting material. Or to stretch the shavings when we get low. The mice love them and it helps to destroy any sensitive information that might be in the shredded documents. (yep.. certified paranoid freak here.)
Jenn