I am sure a lot of people will argue both ways and unfortunately there seems to be no 'official answer'. Part of my just wants to write and not pay any attention to this seemingly insignificant detail but I am curious how does the SO community feel about one option over the other? If you have an opinion state it and give supporting reasons. I am pretty sure vim has a setting buried in it to help me out here so I can have the best of both worlds.
My vote is to just type paragraphs until my eyes bleed and let the wrapping occur as it will because it frees me from having to format the text with each and every edit in the middle of the text.