To my understanding hand driers are less hygienic. With paper towels you actually wipe off some the grime while with hand driers any left over stuff just dries on your hands.
The Dyson ones I've seen have only ever shot cold air on my hands and pushed my hands against both sides of the dryer. Maybe they've been horribly misconfigured at all 3+ places I've seen them at, but in my experience they've just been less effective and less sanitary than both traditional air dryers and paper towels.
