I used to paint miniatures all the time. Lately I've fallen out of the habit. Which is a shame because I have so many still unpainted and I have really enjoyed doing it in the past. I got started painting when our group started playing D&D 3rd edition. The rules really emphasize that kind of tactical layout (Attacks of Opportunity, etc.). Over the years, I've drifted away from d20, but still liked slapping paint on pewter.
I'm a big fan of the OSR, but those rules are not generally focused on the tactical layout of combat. Rather, they lend themselves better to an abstract "Theater of the Mind" style of play.
Minis have their pros and cons. On the one hand, having minis for the party and the monsters can be fun eye candy. On the other hand, it can be a distraction when you don't have the perfect mini for everyone and everything on the board ("I know I said they're bugbears, but I only have orc minis, okay?"). Not to mention the time and expense of buying/painting the things!
Groups vary, so I don't know that there is one best way to handle it. Personally, I think Crypts & Things is a great example of a game that benefits from ToM play. So many of the creatures are so bizarre that having minis for them would be quite difficult. Not to mention that a concrete representation can limit a player's imagination when picturing some of these monsters' horrific natures.
I go back and forth on this too. I thought this was a really neat compromise that might work. You have all the benefits of miniatures in knowing where everyone is, but you don't have to build dioramas and have every miniature: http://clashofspearonshield.blogspot.com/2014/09/abstract-battle-boards-anybody-use-them.html
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