Most of the toilet paper in public restrooms, such as those in restaurants, contain recycled material. Very little of the toilet paper consumed by American households does. European households buy much more toilet paper containing recycled material.
Much of the world uses no toilet paper at all. The figure I have seen, though couldn't locate in an official source, is that only 30% of the world's population uses toilet paper. As someone who has lived in a country where most of the population doesn't use toilet paper, I can say toilet paper isn't necessarily the method that gets you the cleanest, though in my opinion it is the most convenient.
Interestingly, the recession may help sales of recycled toilet paper. Recycled toilet paper is often less expensive than premium, ultra-plush triple-ply stuff. Last spring, the New York Times reported that sales of premium toilet paper had plunged. I urge everyone to consider buying recycled toilet paper: it's one of the few opportunities to go green by spending less.