I DO ACTUALLY KNOW THE ANSWER TO THIS ONE!!!! the reason people used to put butter on cats paws is............
when a cat ventures outside (normally in new surroundings), if it has butter on it's paws it will stop and lick it off, as cats are very clean creatures the butter and the bits of debris that will eneviatibly stick to it will annoy the cat. Thus, making the cat sit down for a minute and take in it's surroundings creating a mental map of where it's home it.