I have been doing a bit of a comparison between Mendeley and Papers recently because I haven't used Endnote for a while, actually since my last post on Reference managers. People suggected Zotero and EndnoteWeb to me, but I didn't like either of them.
I must say, I really love Mendeley as a social tool. It is great to be able to share pdfs with collaborators and to be able to access my references as easily at home and at work, especially since I have a PC at home and a mac at work.
Creating collections with all the associated metadata for publications is great. I haven't yet used the word plugin, so I will let you know shortly what I think of that. The down side with Mendeley is that you only have 500Mb of space online at the moment.
Papers is cool too, especially the fact that you don't need to open up a pdf reader as a separate program, you can do Google Scholar, ISI, Pubmed etc searches within Papers and automatically download pdfs if your instituion has access. You can highlight words in the pdf and do searches on those or highlight the doi and get all the associated metadata. Unfortunately, it only works and macs and doesn't have all the social networking aspect that Mendeley has.