Yes, I use both at the same time. Sometimes I draw (for water, low lying vegetation that causes difficult terrain, etc).
Sometimes the blocks are trees, sometimes buildings, sometimes walls. I made the 1X4s so I can make short "bridges" or sometimes as fallen pillars and so on.
Oh, and I guess I forgot to explain - the larger 2X2 and 2X4 are hollow. Saves a little clay and means they can double for things like fountains.
I didn't show them but I also have squares of various sizes - 1x1, 2x2, 3x3 - made from a heavy craft paper (not sure exactly what to call it, my wife picked it up at Michaels) that we use to note where that wall of flame is, or occasionally to let the players know that the spider is huge instead of large.
