I keep my cage floors bare, it makes it easier to pick up stuff and take a damp cloth and wipe it clean. I hate having papers on the floor of the cage and feel it sounds like a worse idea than having substrate, since they may stick their tongue to the sheet, and it seems harder to get the sheet out of your mouth. Paper towel doesn't dissolve in the gut (trust me, my dog's pooped out whole sheets that look completely intact) and newspaper is full of ink. So I opt for bare.
No, chameleons don't stink. Other reptiles' poop smells a lot but chameleons don't really smell. I know when my roommate's bearded dragons pooped outside of the cage it would clear the room, but I've had chameleons poop in a small cage in a car and you can't tell.