In another thread Mike. M asked: "Is there still a Guarani culture that is different than the Spanish culture? Or has it all melded into a Paraguayan culture?"
The answer to both questions is yes, oddly enough.
During the colonial era a mixture of Spanish and indigenous cultures flourished in a way that did not occur elsewhere in the Spanish colonies. The resulting Paraguayan culture truly is a mix of the two - the influence of an indigenous and rural culture is especially noticeable if you leave Asunción.
I feel compelled to point out that the Guaranà were/are not the only original inhabitants of Paraguay. There are about 20 different tribes or "etnias" which are usually broken down by linguistic families - Zamuco, Mataco, Maskoy, Guaicuru, and GuaranÃ. I think the later was the largest (spread throughout latin america) and perhaps assimilated with the colonists because they weren´t as bellicose as other tribes but that is probably a gross oversimplification.
There are few "pure" Guarani indians left in Paraguay but their culture remains strong and present through the Guaranà language which is spoken by most Paraguayans to varying degrees. The Guaranà culture is truly encoded in the language - as it is a culture that developed in the wilderness many of the references and descriptions have to do with animal behavior. For example: someone who is hard headed and stubborn might be compared to a hard shelled beetle. These cultural nuances carry over into Spanish as well- many Paraguayan phrases or sayings in Spanish are direct translations from GuaranÃ.
Both Guaranà and Spanish languages are present in the lives of your average Paraguayan. There are a few indigenous communities who may speak no Spanish just as there are a few people (in urban areas) who speak no GuaranÃ. Most Paraguayans use both in a mixture known as Jopará - the further you go from urban areas the more Guaranà heavy that mixture becomes. In fact you do not have to venture far before you will find people who would rather just speak GuaranÃ, even though they can speak Spanish.
So what was meant to be the short answer to your question is: Guaranà and (colonial)Spanish cultures did merge to form a Paraguayan culture wherein there is a strong Guaranà influence through the daily use of the Guaranà language (and Spanish that has been influenced by GuaranÃ).
If you are curious about Guaranà check out the "Guaranà School" posts on my Paraguay website - guidetoparaguay.com/labels/Guaran=C3=AD_School_-_Escuela_de_Guaran=C3=AD.html
or guidetoparaguay.com and select "Guaranà School" in the "read about" drop down menu on the right.
Enjoy!