What's your opinion on normal sparring vs "padded" sparring?

The best is a combination of the two. You can do an awful lot of good training, unpadded, with limited contact. Both parties have to be extremely precise. The problem with padding is that people can get careless. If the fighters' training level is high enough, no amount of padding will help. A while back, I paired off with a sixth degree for one steps. We each ripped off sixty or so. Every block and every strike that he did caused the sleeve of his gi to crack, like a flag in a stiff wind. Each move would have broken one or more bones. He never touched me, although many times I could feel the air move. That is an ideal use of non contact.