I recently saw something in a cake supply store called "Madagascar Vanilla Paste".

Do I use it like I would Vanilla Extract?
Is it better in cakes or buttercream icing?

Yes, use it as you would vanilla extract. It is great in cakes, buttercream, cookies, really any baked good that you would be able to see the flecks of bean in. I would just use vanilla extract for the others (like chocolate cake and brownies).

You use the paste just like you would the pure extract...1 tsp equals 1 tsp. I used the vanilla paste for baking until I read a review in Cook's Illustrated. They suggested that you use the paste for custards and stick to the extract for baking. Given the high price of the paste, I have to agree with them...except...I like the look of the vanilla seeds in the cake that you get using the paste

I have to disagree to a degree. Yes, it is expensive. I get it in bulk and it's still $1.00/oz. I buy it 64 oz at a time. It enhances all recipes. I make a gourmet true vanilla extract and even though it is incredibly delicious, the use of the two together is the ultimate vanilla for me to use in every baking product. I also use both liberally, adding much more than normally called for in a particular product.

Where I agree with southerncross is that unless your prices can support it, a more rationed use makes more sense. Even though my prices have both vanillas built in, I quickly go through many 32 oz bottles and it quickly becomes one of my most expensive ingredients. This is definitely an ingredient not to skip over in pricing out a recipe, especially if you are heavy-handed like me.

On a personal preference, NM is far superior in taste to Silver Cloud.