Google Docs is reported testing a new feature that paginates documents. The Google Docs pagnation feature will be available from View > Document view > Paginated and you'll still be able to use the compact view.
Right now, you can paginate documents using print preview, but this only shows a read-only view and it's slow.
Here's a Google Docs document that you can try the new pagination feature.
]Source, Via: Alex]