Ugh, why oh why is everyone comparing this to Inception? I find it to be a lazy comparison.
Paprika is about entering 21st century life, when our fictional and reality selves merge in a world of pop culture, psychoanalysis and escapism. It is about entering new, unchartered realms that can be used for good and evil. Paprika is kind of like every film you have seen before (and some scenes are lifted directly out of other films, but with a wink), but in true Satoshi Kon style, it mixes a spiralling maelstrom of confusing events, the blending of imagination and reality, and a lack of trust with new-age ways of understanding and manipulating identity. Various characters live in a world which greys the boundaries between fact and fiction, both in realist and imaginative examples.
In saying that, the basic plotline of this film was rather formulaic for the sub genre. Even though the film twists and turns to always keep you unsettled, it sits on top of a rather conventional bedrock which falls into the usual traps inherent in such a premise.
Paprika is a smart and playful ride on familiar events, but it lacks the cohesion and resolution which made another Kon film like Perfect Blue work so well.