Originally Posted by dah328
If by "paddle shift" you mean SMG, a more accurate description would be that it's an "automatic way of shifting a manual." SMG is a completely manual transmission with an electronically-actuated clutch unlike tiptronic or other gimmicks that are automatic transmissions in which the driver can "suggest" shift points to the computer.
To add on to dah328's post, SMG, DSG, and other computer-controlled clutch gearshifts are often called semiautomatic transmissions. Tiptronic, Steptronic, and other shiftable automatic transmissions use torque converters to transmit torque from the engine to the gears. The differentiating feature between these systems is not that you have paddle-shifters or even that you can change gears, because both systems have those kind of controls, but whether it uses a clutch (or two in the case of DSG) or a torque converter.
The automatics are getting quite good. There are a number of them now that shift fairly quickly and do rev-matched downshifts.
BTW, if you want to see a great example of what a skilled driver can do with downshifts, check out this video of Hans Stuck driving the BMW M3 GTR racecar (the one with the V8 banned in the ALMS) around the old Nurburgring:http://www.bmwtransact.com/microsite/Nurburgring/
It's an H-pattern shifter with dog gears so he doesn't use the clutch once the car is moving, but he has to manually perform the rev-matched downshifts. The upshifts are more automated: there's a force sensor in the shifter knob that detects when he's shifting, and cuts the engine if it's an upshift. He's moving very quickly too --- I believe he's setting pole for the 24 Hour race at the Ring which the car ultimately won. Note how calm he is compared to how fast the car is going.