I currently work as a commercial construction litigation paralegal. My work focuses on civil litigation. Let me start off by saying there is absolutely no correct answer for the questions you are asking. Every area of law varies, and every law firm varies. The tasks certain paralegals are asked to do also varies. Some paralegals are treated like secretaries where all they do is answer phones and calendar deadlines. Some paralegals are basically attorneys without a law degree because they literally handle every aspect of the case.
With that said, I do everything, and I mean everything in the law firm I work for. I work in a small firm with three attorneys and an office manager. I do everything from making sure the garbage makes it to the curb on Mondays and Thursdays to filing lawsuits. On a typical litigation file, I will: draft correspondence, calendar response dates to discovery, draft discovery responses and outgoing discovery, draft petitions, call court personnel, set hearings, set trials, organize mediations and arbitrations, draft scheduling orders, email clients, manage the file room, make copies, bind claims, import digital documents into document management software, keep track of my billed time, proofread, prepare documents for filing with the court...
That is probably a very short list in the long list of things I do. If you were to ask a family law paralegal the same question, his/her list would be very different. Also, every case is differently. You will NEVER do the same exact thing on different files. There are always variables.
There is no such thing as a "best area for a paralegal to work in". Again, that is 100% subjective. If you were to throw me into family law, I would quit. It is not the kind of work I would want to do. The best area for a paralegal to work in is the one that makes the paralegal happy.
There are a few posters on Yahoo! that preach doom and gloom on the paralegal profession. Jobs are hard to find, but that isn't exclusive to the paralegal profession. It is ridiculous to make such overly broad assertions. Just like any profession, some areas are over saturated, and others aren't. You just have to do some leg work and see what the market is in your area. I live in Texas, and paralegal jobs are always available. Might not be the same for some small town in the middle of nowhere, and that goes for ANY career choice.
Lawyers do not work for free.