For me, paleo didn't magically "fix" anything, but it basically made me realize I had a problem. The reason that happened was because paleo asked me to really examine everything I was eating. Incredibly, though, I've been working through my issues with compulsive/binge eating since going paleo - they're nowhere near being gone, but I am on my way! Here's what helped me:
-loosening up on paleo rules. I noticed, for example, that when I REALLY craved bread or a bowl of cereal or something, I would tend to binge on replacement foods (nuts, dried fruit, paleo baked goods) or the actual non-paleo food itself. By letting myself eat a bowl of rice instead, I've found that my desire for that particular food is much more abated. (And a bowl of rice is much much better than a binge, even if it is technically "paleo.") I don't, however, let myself eat just anything that I crave... there's still a certain amount of effort involved to steer myself in the right direction. This effort is not to be confused with willpower though!! If you feel like you are exerting extreme force and willpower to keep yourself from bingeing or eating compulsively, I'd say what your approach is not healthy or skillful (and will probably fail).
-Acknowledging, and paying attention to, how terrible it feels to eat horrible foods. Rather than viewing paleo as a bunch of rules and restrictions, I've actually internalized the knowledge of how unhealthy some food is and now I don't even really want it anymore.
-MINDFULNESS PRACTICE. If you aren't familiar with mindfulness or Buddhist practice, I REALLY recommend it. Here's what it means: noticing the emotions when you binge, what conditions or intentions or desires or feelings accompany or prompt compulsive eating; bringing awareness to how you feel after eating compulsively; noticing what desires or needs eating does or doesn't fill; accepting yourself; and letting go of certain ideas or self-images.
-For me, it also helps to ask myself these questions before I eat (or when I have the desire to eat): Am I physically hungry? If the answer is yes, I ALWAYS allow myself to eat. Not letting myself eat when I am actually hungry always leads to problems. If I'm not, I ask: What is the emotional/social/psychological reason for my desire to eat? Will eating fulfill that desire? Sometimes, the answer is yes to that too; if I'm at a nice dinner party, for example, or if I want a warming, soothing bowl of soup when I'm feeling very sad. I also ask: will eating now cause me more suffering in the long run, or less suffering in the long run? After asking myself these things, I am more guided to make the right decision.
-Simply getting distance between myself and the act of eating. Going outside, calling a friend, even just putting the fork down for a minute. Usually I regain my sense of self and remember what I really want.
Getting over compulsive eating is one of the hardest things I have done in my entire life. But I'm finding that when it is lifted I feel joy and energy - I'm not dulling my senses or emotions, I'm dealing with things instead. I'm actually encountering the real world, not escaping from it with food. And encountering the real world, and encountering my own problems and emotions, can be beautiful!
As for those questions you asked - here are my answers/approaches to them:
Do you still binge when in emotional
distress, just on paleo foods?
For me, that's not good enough - it's not fixing the root of the problem. Like I said before, I think that eating a bowl of rice is better than a binge.
Or do you break down and go non-paleo?
To me, paleo/nonpaleo is less important than compulsive/intentional.
Or do you find you don't have the
urges anymore?
I still have the urges - the task is to become aware of them, and understand them for what they are.
Did you transmute it into something
else, like exercising?
Again, that doesn't really solve anything - that's just trading in one addictive behavior for another.
Or did you find a magical way to help
you deal with your emotions in a
healthy way?
For me, that's what mindfulness practice, meditation, and Buddhism has been.
One last thing: I really recommend any of Geneen Roth's books, Women, Food, and God or Overcoming Emotional Eating. And if you're at all interested in mindfulness or Buddhism, I'd recommend the (free!) podcast Audio Dharma, any of the talks by Gil Fronsdal.