I fish a fairly stiff paste and bury the hook. I have no problems hitting bites. I am a firm believer that the fish closes its mouth when taking a bait so you are not only pulling th hook out of the paste but also against the resistance of the paste on the inside of the lips.
I use a piece of paste a bit bigger than a small marble.
I can only tell you how I do it, and anyone who knows me well will tell you i keep things as simple as possible.
For alot of my rigs, paste or otherwise, I use the Hook In The Loop to tie my hooks on, and so far its served me very well.
It seems to work especially well for me with paste, as the knot at the top of the loop gives the paste (which I tend to fish very soft) a little something extra to grip onto as it fall through the water.
Simply take some paste about the size of a 50p, flatten it out in the palm of your hand, place the line just above the knot over the centre of the paste, and fold it round the line, pull the hook up into the paste, so that the knot and hook are just covered by the paste, and give a little squeeze into a rough diamond shape and place into your toss pot.
Ship out, twist pole and as the paste starts to fall through the water, lift the pole so that the float is just out of the water. You will see the float "cock", just as the paste pulls the line tight, then lower the float into the water
The reason I keep the float out of the water etc is to make sure the paste is below the float as it hits bottom, just as you would when plumbing up, so you know the bait is in the right place.