A player in my gamed had a half-dwarf/half-gold dragon paladin/sorcerer. I let him freely jump back and forth. I was also going to let him use his paladin turning ability to breathe more often rather than turn, but he focused on sorcerer enough that he never made paladin 3 (also because of the ECL mod for half-dragon).
Overall, it worked out quite nicely. The character was about the right power level as the rest of the group. He also had a different sort of personality.
He was all self-sacrificing and definitely qualified as extremely lawful and extremely good. Because he was a sorcerer, he was unwilling to risk any heavier armor than a chain shirt. He was disgustingly obese. He drank like a fish, but with his 24ish constitution he almost never got drunk.
He also had a tendancy to hoard treasure the group found -- he was half dragon, after all. Since he was easily the strongest character, the group tended to give him a lot to carry. Things like gems and coins that the group never remembered to divide up stayed in his posession. He also always seemed to have a darn good reason why the best magic picks should go to him ("That +2 axe we found is by a legendary dwarven smith, an artifact of my people. Yes, I know I've got two magic weapons already and yours was just sundered, but you certainly wouldn't expect me to ignore my people's legacy, now would you. That's a good fighter."
So, very much not so shiny. Very much paladin. Very much dragon.