I would stay away from the Paragon 3. It can't do even simple lighting programming (like keeping the front light on even in reverse), has very little sound programming flexibility, and in general is poorly executed in its command structure. The Paragon 4 is better, and is perfectly acceptable for general running. At least you can program the headlight on it. I imagine 90% of folks would find it just fine.
That said, I have a number of BLI Mikados. Some came with 3's, some with 4's. I removed the Paragon in all of them and replaced it with an ESU Loksound 5 and added a TCS KA-1 keep alive for better operation when doing slow-speed switching moves (adding a keep alive to the Paragon is not possible without a degree in electrical engineering and expertise in SMD soldering). I find that the ESU achieves better slow-speed performance from the engine, better matching of chuffs to wheel rotation at slow speeds (which is a major sticking point for me with steam engines), is more flexible with lighting programming, and has better whistle and bell options (although that won't matter with the T1, since all you want is the original Pennsy whistle and bell, which the Paragon 4 gives you). But for the vast majority of people, the Paragon 4 will do what they want.
John C.
