After reading The Paleo Diet and the Paleo Solution, I thought that the Paleo stance on butter was pretty clear. Then, I came across Mark Sisson and his Daily Apple and he seems to encourage copious butter consumption.
I understand that all butter is not created equal (pastured vs. conventional, clarified vs. milk solids), but I'm a little confused at this point.
Anybody know better about butter?
For reference you could check out the 42 other threads tagged "butter".
Long story short: Most paleo style eaters include (usually pastured) butter in their diet at least sometimes because of its value as a readily-available, affordable, vitamin soluble, high quality stable saturated animal fat that can be used in high temperature cooking.
As already noted, there are lots of answers on here about butter, but the basic point is this:
Butter has lots of good things about it (see familygrokumentarian's answer) but it has some milk solids (around half a gram of lactose and protein per 100g) which may be bad. How bad this gram of milk solids per 100g of butter will be depends on how dairy-sensitive you are, which varies absolutely massively across the global population.
Of course you can always eat ghee, which has had even these milk solids removed.