Just to chime in with my 2p....

I have a z1-5 Travelcard on Oyster, but live outside London, in
Bushey. That card will get me by bus to Edgware, Stanmore, or H&W, and
thence all around London. Given that I generally use the LM trains
from H&W, it's really reasonably cheaper than the equivalent paper
tickets, even more so once you factor in the buses, and has the added
bonus of when I'm coming home and want to go all the way out to Bushey
or Watford, I don't have to buy bloody annoying extension tickets any
more thanks to PaYG being valid out that far. It also gets me all the
way out to places like Croydon, which makes trips to places down south
(Brighton, etc) *much* cheaper.

....only downside is now that whenever I meet up with friends in town,
I'm the one having to go wherever they are as my travel is effectively
free