BellaBoo, doesn't that have a wax coating on it?
I have never used the phone book for just the reason you mention, but know several who do and have never had problems. Bonnie Hunter of quiltville.com uses them all the time! At the school I work in we get a large pack of them every year; most of them end up in recycling. The ones here no longer have residential listings, only business. Most folks don't want them sitting around but would rather look info up on line. Some of them are now smaller than standard sized (8-1/2" x 11"), too.
I used to buy children's drawing pads from the dollar store, but they are too large to put through the printer, so had to be cut down. Now I buy reams of ruled newsprint from Amazon (
http://www.amazon.com/School-Smart-R...=1&*entries*=0), School Specialty (
http://www.store.schoolspecialty.com...06&item=466169) or Staples (
http://www.staples.com/Pacon-Ruled-N...product_730131). Sheets of 500 for under $10; it's the paper that primary school children use to learn to write. No problems running through printer; the blue and/or red lines are not distracting enough to interfere with pattern printing, or can be printed on back.