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This sounds like a very complex and challenging problem, so we should divide the big problem into smaller simpler challenges.

Your final goal is to know the position and orientation of the paddle at all times. So, the first thing we need to think about is how to detect and track the paddle itself. This raises some very important questions. What kind of camera are you gonna use? What will be its position in regards to the player? Are the environment conditions stable? Or there may be different lighting conditions? Shape and colour approaches wont provide enough information to solve your problem due to your high demands (knowing its position at all times).

Have you thought about using a kinect for that? It would provide depth information that would be absolutely vital for you and would eliminate a great deal of complexity. With that, you could use a skeleton tracking like approach.. it tracks the position and orientation of your joints, and it could be easily adaptable to add an extra "joint" (the paddle). This kind of algorithm makes assumptions about your body to detect all your joints, and then uses a kalman filter to track their position and orientation. I think this would be a good starting point.