Board Thread:Skyrim/@comment-110.168.240.168-20140424104245/@comment-13518348-20140424155406

I never kill him. Why, because he helps you more than the Blades do. Plus the Blades (namely Delphine) are jerks.

Paarthunax helps you defeat Alduin and he aids you in meditating on Words. Sissel in Rorikstead mentions him: "I had a dream that there was a good dragon. He was old and grey but he wasn't scary."  (This doesn't really mean anything but I take it to mean Paarthunax is a 'good guy'.) Paarthunax does say he struggles with his inborn dominant nature but he doesn't return to it.

"What is better - to be born good, or to overcome your evil nature through great effort?" - Paarthunax

The Blades don't help you at all really. All they do is send you to do their bidding: Go to the Thalmor Embassy, Go find Esbern, Help us rebuild, Go kill dragons for us. Then there's the whole 'kill Paarthunax or we won't help you anymore' thing, The Blades were meant to serve the Dragonborn, not the other way around.